SOUTH HAVEN — Frank Sardone sees nothing but positives in the overwhelming voter support for the pending addition of South Haven Health System into Bronson Healthcare Group.
Nearly 90 percent of the voters in the South Haven area backed a proposed affiliation agreement with Bronson. The result affirms “what our vision is with South Haven,” said Sardone, the president and CEO of Bronson Healthcare in Kalamazoo.
“It just further validates what we are trying to do and it’s a nice situation to walk into,” Sardone said.
As a public authority health system, South Haven Health needed voter approval in two cities and seven townships in Van Buren County to proceed with plans to affiliate with Bronson. The transition to Bronson ownership comes Jan. 1, pending state certificate-of-need approval.
South Haven Health System consists of the 65-bed South Haven Community Hospital, an urgent care clinic, a medical office building and a wellness and rehabilitation center. The system also includes a primary care office in Bangor.
Becoming part of Bronson helps South Haven with access to capital and physician recruitment, as well as improved access to medical specialties and diagnostics — areas that are problematic for many small, rural hospitals.
“We’re just thrilled,” said South Haven President and CEO Joanne Schroeder. “It really is going to allow us to continue to have local health care.”
In return, Bronson expands its reach further across the region. Except for existing collaborations with South Haven, Bronson lacks a strong presence in the lakeshore market of western Van Buren County, although it does own and operate LakeView Hospital in Paw Paw on the county’s east side.
Assuming ownership of South Haven is “very consistent with our vision to deliver health care regionally,” Sardone said. A regional approach allows for greater operating efficiencies and optimizing costs across a broader market — which helps preserve the viability of South Haven Health System, he added.
“We are concerned about access to care throughout Southwest Michigan. South Haven is an important access point and a point at which we want to continue to be able to offer the full range of health care services that people in that area need,” Sardone said. “We think it’s best to able to look at the broad region and look rationally and logically at how we continue to provide access to care.”
Under their affiliation agreement, Bronson Healthcare committed to investing $18 million over five years in facilities and services in South Haven and to contribute $1 million to a new fund within the Bronson Foundation dedicated to philanthropy in the South Haven area. The health system will take on the name Bronson South Haven Hospital.
Bronson also agreed to maintain an emergency room in South Haven for at least five years and longer if it’s financially viable.
South Haven Health System began seeking a partner last January, citing shrinking reimbursements from Medicare, Medicaid and private insurers, and the increased use of high-deductible health plans that contribute to bad debt. The health system in the 2016 fiscal year that ended June 30 lost $1.5 million on total revenues of about $45 million, although operations have been in the black since July, Schroeder said.
The affiliation is the latest for Bronson, which acquired LakeView Hospital in Paw Paw in 2007 and a majority stake in Battle Creek Health System in 2011.