Metro Talks With Borgess Heating Up

June 5, 2002
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GRAND RAPIDS — The specifics of Metropolitan Hospital’s plan for a new suburban campus won’t come together until after the hospital completes talks with Kalamazoo’s Borgess Health Alliance.

Directors from both organizations hope to decide by this summer whether to merge the two health systems, or form an affiliation with shared administrative functions, Metro President Michael Faas said.

Once Metro and Borgess decide on the scope of their relationship, Metro administrators will begin finalizing cost estimates and a financing package, and decide the exact scope of what the hospital envisions as a “health care village” at Gezon Parkway and Byron Center Avenue in Wyoming. Rietberg Realty Co. brokered the 150-acre land deal.

The talks with Borgess include seeking financial assistance from the Kalamazoo hospital’s parent company, St. Louis, Mo.-based Ascension Health, to develop the suburban campus, Faas said.

“We will not be able to duplicate Metropolitan Hospital at that campus all at once by ourselves. We need a partner, and we want that partner to be another health care provider,” Faas said.

Metro and Borgess formed an alliance two years ago to explore a partnership between the two as a way to reduce operating costs. Faas expects the talks to culminate as early as June but no later than August.

By partnering with Borgess, “we can drive a lot of cost out of the system. We can become very efficient,” Faas said.

While Ascension could become a key player in Metro’s future, the hospital needs to build a new campus regardless of what comes out of the talks, Faas said.

After defining its future with Borgess, Metro will begin preparing for the regulatory review process. Faas hopes to have applications filed with the state sometime this year.

Step one for Metro is to obtain a waiver from the Michigan Department of Community Health to relocate more than two miles form its present campus, a move existing state rules prohibit. If successful in securing the waiver, Metro would then seek a certificate of need (CON) from the state to build the new facility.

When that regulatory process begins, it will include questions about how the move may affect patient access, the cost of medical services, improve the quality of care, increase operating efficiency, and reduce the present excess of hospital beds in the Grand Rapids market, said Lody Zwarensteyn, president of the Alliance for Health in Grand Rapids.

The Alliance, a regional health care planning agency, will review Metro’s CON application and recommend approval or denial to the state. The organization’s review will focus on whether the hospital’s relocation is practical, Zwarensteyn said.

“It’s real simple. First off, you have to show me it’s feasible,” Zwarensteyn said.

In Metro can adequately address those questions, it’s likely the Alliance will back Metro’s request for a relocation waiver, Zwarensteyn said.

“The move makes sense,” he said. “They have a great opportunity to demonstrate to the community this will be a win-win proposal, and I have every reason to believe that once they demonstrate that, the community will rally around it.”

Zwarensteyn, however, wants to make sure that Metro’s possible relocation is a case that, from a statewide perspective, doesn’t need repeating.

“It has to be handled to match the uniqueness of Metro’s situation,” he said. “What you don’t want to do is open up the flood gates for everybody to leave some of our cities.”

Faas is confident Metro can meet the Alliance’s criteria.

Metro is out of space and landlocked at its present facility on Grand Rapids’ southeast side. The hospital rents or owns space in eight office buildings located within a mile or two around its existing Boston Avenue site.

A new campus would produce cost-savings by enabling Metro to consolidate administrative functions at one site and build efficiencies into the facility, Faas said. Metro, now licensed for 238 beds, would build no more than a 200-bed hospital, he said.

“It’s not going to be hard to prove we can do this efficiently and save money,” Faas said.

Metro, he said, has a strong case for improving access to health care. The new site is alongside where the state plans to build an interchange for the new South Beltline Freeway, minutes away from U.S. 131 and I-96, and sits within an area south of Grand Rapids that expected to continue rapid population growth for years to come, he said.

The suburban campus in the rapidly expanding southern suburbs of Grand Rapids “makes sense just for access, convenience and good patient care,” Faas said.

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