State Officials Simplify Metros Move

March 28, 2002
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LANSING — Metropolitan Hospital would only have to prove a need to relocate to a new suburban campus to secure state permission for the move, under guidelines handed down to a panel that will examine changing the rules governing hospital relocations in Michigan.

The state Certification of Need Commission this month stripped quality, access and cost-savings issues out of a charge to an ad-hoc committee that will formulate a rule change Metro needs in order to eventually relocate to a $155 million health care campus it envisions developing in southern Wyoming.

The Michigan Department of Community Health had those issues removed from the ad-hoc committee’s direction because they are not pertinent to the primary question of whether hospitals can justify a need to move, Director James Haveman said.

“All of the rest was just unnecessary,” Haveman said. “Why make this complicated?”

Metro executives in the past have complained that financial provisions included in a previously proposed rule change developed in discussions it had with the Economic Alliance for Michigan, a statewide business-labor coalition, and the Alliance for Health in Grand Rapids were too stringent, although they were open to some sort of requirement.

Metro and the two organizations, at the request of the CON Commission, formed a task force that spent more than two years working out language that would serve as the foundation for changing standards under which hospitals across the state could seek permission to move.

Haveman believes that any issues beyond need are not needed in the discussion. He specifically cited provisions in a November report from the task force to require hospitals to prove that relocating would result in a 10 percent reduction in its operating costs, with the hospital sharing a significant portion of the savings with the community.

Those kinds of financial provisions don’t belong in a new CON standard covering hospital relocations, especially when it comes to Metro’s case, Haveman said. Metro, he said, has a good case for proving a need to relocate, has broad community support for its plan, and has promised to continue its support for indigent care in Kent County, making access, quality and the sharing of cost savings moot points in a rule change.

“Why can’t they move? It’s inevitable they’re going to move,” Haveman said. “Let’s stay with the basic issues.”

Removal of the cost, access and quality issues from the ad-hoc committee’s direction — if it’s followed at the ad-hoc committee level — may make it much easier for Metro to secure state permission to move 10 miles from its present location on Grand Rapids’ southeast side. Present CON standards prohibit hospitals from moving more than two miles in markets that are deemed overbedded, as in the case in Kent County.

James Ball, vice president for health initiatives at General Motors and the ad-hoc committee’s chairman, declined comment on the revised charge to the panel, which some say retains the ability to restore the deleted issues to any proposed relocated standard.

Once a rule change is in place, Metro can proceed with a formal CON application to relocate.

Metro was “very grateful” for the change in the ad-hoc committee’s charge, Vice President of Marketing Jim Childress said.

“We look forward to the opportunity to present our story as the process goes forward,” Childress said. “We were quite clear from the very beginning that the very simple approach was the best public policy.”

The discussions on changing state hospital relocation standards to accommodate Metro turned decidedly contentious last summer when Metro executives, fearing their efforts were bogging down, had local legislators slip language into a Department of Community Health budget bill that essentially would have allowed the hospital to move.

The amendment was later ruled unconstitutional and unenforceable, but left a deep division between Metro and task force members who felt its effort was an end-run around the public CON review process.

Task force members also say the financial provisions on the proposed language for a rule change came from Metro’s own data and executives’ offer to share cost-savings from the new campus with the community. They were simply calling Metro on their own offer, they say.     

The ad-hoc committee, meanwhile, was directed to report back to the CON Commission in April. Adoption of a rule change at that time would enable a new hospital relocation standard to go into effect this summer.

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