Hofer
Hofer

It is a new foundation, with a new name, but with a familiar face at the helm.

The Provident Health Foundation, a 501(c)3 not-for-profit foundation, has a mission to support Aurora Medical Center - Bay Area and its charitable mission and improve community health.

John Hofer is its executive director.

The Provident Health Foundation got its start with $25 million provided by Advocate Aurora Health, which purchased the former Bay Area Medical Center in April 2019. The funds were earmarked for the private foundation, which will initially be run by a six-member board. Five of the members were appointed by the M&M Healthcare Board set up during the transition, and one by Aurora Health Care.

Ed Harding, president of Aurora Medical Center Bay Area, serves on the board with Marc Jamo, a former BAMC and BAMC Foundation board member; Greta Hodge, former BAMC Foundation Board member; Terri Derusha, former BAMC Foundation Board member; Kim Brooks, Marinette County; and Jenny Short, Menominee County.

Hofer, who served as BAMC’s marketing and Foundation director, stepped into his new role in December. Recently, the new Provident Health Foundation secured office space at the former First National Bank Building in Menominee, now home to KK Integrated Logistics.

Hofer said the Provident Health Foundation will have an office on the second floor of the original bank building, sharing the space with Hoffman Law and Schwaba Law Firm.

According to Hofer, the purpose of the Provident Health Foundation is to improve and sustain the health and well-being of the people who live in Marinette and Menominee counties and to ensure them access to affordable quality hospital care.

Chuck Kalhoefer, former chairman of the BAMC Board of Directors, said establishing a foundation to enhance the services of the hospital and support efforts to improve community health actually happened years ago, when BAMC looked at the value of the hospital as an organization, as well as determining its assets.

“As healthcare was evolving, and certainly with Obamacare and all the issues associated with that, competiveness in the market and medical records was going to be a huge expenditure for rural hospitals to get on board ... which led to the initial sale of the 49%,” said Kalhoefer, of the decision to find a partner to build a new hospital.

“In 2014, we decided to partner with Aurora (Health Care),” Hofer said. “This was unique, as Aurora was in a minority position.”

With a financial partner, BAMC was able to design and build the new $135 million hospital on University Drive, implement electronic medical records and bring new technology to the area.

Disadvantages, however, came when BAMC was not able to become involved in the group-purchasing most Aurora facilities shared, “because that was for corporate Aurora and not for minority partnerships,” said Kalhoefer. “In the end, when we looked at cost benefit and what the goal out here really was, the only practical way to go was to look at some additional opportunities with Aurora.”

Hofer said there were huge benefits to the initial partnership, “but the board still had to weigh what the long game was.”

“In our negotiations with Aurora, what we wanted was for them to ensure, and they did memoralize in the agreement, that they would operate this as a hospital,” Kalhoefer said, “not to take this over and run an emergency room and start transporting everybody to Green Bay. We wanted this to be what it always was — a primary care hospital to service the greater Marinette-Menominee area as (residents) became accustomed to.”

Before the doors of the new BAMC opened, Advocate Health Care and Aurora Health Care announced plans to merge — creating the 10th largest health care organization in the country.

During that time, discussions were already ongoing, and after the merger, the decision was made which led to BAMC being wholly owned by Advocate Aurora Health in April 2019.

The agreement called for Advocate Aurora Health to contribute $25 million to create a new foundation. “It was part of the negotiation,” said Hofer.

The goal to set aside $15 million as principal “held exclusively for capital improvements and operating purposes of Aurora Medical Center Bay Area and Aurora Bay Area Medical Group.”

Aurora Medical Center Bay Area can request a distribution from the principal at any time, but the Foundation can determine if the request does not meet criteria or negotiate a different amount. The goal is to keep the funds in “safe” investments, and to distribute amounts from capital or specific projects, but to distribute all of the principal in the account by the end of 2023.

The remaining $10 million will be moved into investments that “will provide a conservative return,” according to the Foundation. The principal will not be touched. The Foundation will distribute 30% of the fund’s net income to AMCBA annually, and 70% may be distributed at the discretion of the Foundation.

The Foundation, itself, will operate on “reasonable” expenses, paid from interest received from both funds, but never from the principal.

As for the name, Hofer did his own research and found, “in 1893, there was a group of citizens in Menominee who recognized that there was an at-risk population that needed health care — the lumberjacks. And so, they formed the Bay Shore Provident Co., and they went up to Escanaba and talked to the sisters, and the sisters came down and started what they called Providence Hospital, and that eventually morphed into St. Joseph’s.”

Many residents will remember that St. Joseph’s eventually became St. Joseph-Lloyd Hospital, and, ultimately, Bay Area Medical Center.

Hofer said the Bay Shore Provident Co. was a resource for the hospital, “in its formative years,” just as the new Provident Health Foundation will be a resource for health care for the population served by the new Aurora Health Center - Bay Area.

The $25 million which starts the Foundation is deposited at and managed by Stephenson National Bank & Trust in Marinette.