Metro CEO New Site Is Needed For Survival

June 5, 2002
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GRAND RAPIDS — Relocation and development of a new $155 million suburban campus is essential for Metropolitan Hospital’s future survival, the hospital’s chief executive claims.

Without the move from Grand Rapids’ southeast side to Wyoming, “Metro’s going out of business,” hospital President and CEO Mike Faas said.

“We don’t have an option. We realize if we don’t move, we die,” Faas said

Painting a bleak picture of the future if Metro isn’t allowed to relocate, and in the process elevating Metro’s argument, Faas said the hospital is out of room at its present location and can no longer keep up with present patient loads, much less handle future growth. Given those constraints, physicians might begin referring their patients and seeking privileges elsewhere, enabling other hospitals to easily pick off Metro’s market share, he said.

“This place is going to suffer if we don’t get it moved,” Faas said.

Faas’ comments came as he and other Metro representatives sought the support of the Alliance for Health to change state rules to allow the hospital’s relocation to a 150-acre site at Gezon Parkway and Byron Center Avenue, adjacent to where the new South Beltline is being built.

Present standards in the Michigan Department of Community Health’s Certificate of Need program prohibit a hospital from moving farther than a two-mile radius from its existing location in a market deemed to have an excess of hospital beds, as is the case in Kent County.

Proponents of Metro’s relocation say the hospital’s present site is land-locked, has no room for expansion and has poor access. They contend the move would provide the hospital the space it needs to grow, meet increasing demands for services, result in a $5.3 million annual cost savings incurred through operating efficiencies, improve access and bring health care services to an underserved area with a rapidly growing population, and ensure competition in a health-care market that’s dominated by Spectrum Health.

To obtain state permission to relocate, Metro needs to convince the Certificate of Need Commission to revise standards to allow a hospital in “overbedded” communities, in certain circumstances, to move farther than a two-mile radius.

The Alliance for Health last week opted to collaborate with Metro on its appeal to the CON Commission, but not before members of the regional health-care planning agency vented their frustrations over what they perceived as the hospital’s end-run around the normal public policy process.

State Reps. Jerry Kooiman, R-Grand Rapids, and Mark Jansen, R-Gaines Township, late last month attached an amendment to a Department of Community Health $8 billion appropriations bill that would enable Metro to essentially bypass the review process required to relocate. The amendment, offered on Metro’s behalf, would require the CON Commission to take the “necessary steps” to grant an exemption to the existing regulation, provided that certain narrow criteria are met. The criteria were written in a way so that only Metro Hospital would qualify.

Members of the Alliance for Health’s board, as well as a task force that for more than a year has worked with Metro to analyze its relocation plans, saw the legislative effort to allow Metro’s relocation as an attack on the integrity of the CON process, as well as a violation of a spirit of cooperation in building the broad-based community support needed for the CON Commission to revise its standards.

“I’m frustrated and confused by this and angered,” said Mike McMillan, recorder for the United Food Commercial Workers Union Local 951 in Grand Rapids.

McMillan co-chairs a joint task force consisting of representatives from the Alliance for Health and the Economic Alliance for Michigan that’s examining Metro’s plans. He objected to Metro’s efforts to secure a guarantee for itself through a legislative process, rather than work through a policy process.

“If this was a contract we were bargaining, this conversation would be over,” McMillan said. “I don’t get what you want now. You can’t want to not dance with me but make sure I guarantee you sex down the road.”

Despite those frustrations, the Alliance for Health board of directors on July 9 voted to accept a joint task force report that recommended working with Metro to change the CON standards for hospital relocations, while continuing to work on financial and quality issues related to Metro’s relocation and opposing the amendment added to the Department of Community Health appropriations bill.

Metro still needs to prove its case and justify the need to relocate based on cost reduction, reducing excess hospital capacity, and improving quality and access, Alliance President Lody Zwarensteyn said.

“Things still have to make sense and the numbers have to add up, and there has to be a policy basis that can apply to any hospital in the state,” Zwarensteyn said.

Further analysis of Metro’s proposal is also based on whether it’s good for the overall community, not the hospital’s needs, said Larry Horwitz, president of the Economic Alliance for Michigan, a statewide business-labor organization that works on health-care policy issues.

“The interest isn’t what is good for the particular organization of the hospital. It is what is in the best interests of the broader overall community,” Horwitz said.

The Economic Alliance will continue to work with the Alliance for Health and with Metro on having CON standards revised, Horwitz said. The Economic Alliance continues to take the view outlined in a May 17, 2000 letter to Faas from Ed Ozark, vice president of administration at Grand Haven-based JSJ Corp. and co-chair of the joint task force, that it would support CON changes to enable a hospital to relocate more than two miles when there is a “clear and compelling demonstration of net community-wide benefit.”

“The bottom line is that we look forward to working with Metropolitan,” Horwitz said.

Horwitz, however, was discouraged by Metro’s use of the legislative process to achieve its goal.

“They were beginning to make a good case. I don’t understand why they decided to go down two tracks at the same time,” he said.

Faas, in response to objections to Metro’s legislative efforts, offered an apology and an explanation.

Unidentified “powerful forces” from southeast Michigan are working to block efforts through the regular policy process to alter the CON relocation standards so hospitals may relocate when they have a compelling case, he said.

“It may kind of open Pandora’s box,” said David Porteous, an attorney and Metro’s lobbyist in Lansing.

That put Metro in a position where it needed to look at an alternative method it could fall back on if efforts to revise the CON standards bog down.

“I’m just asking that you try to understand our dilemma,” said Doyle Hayes, chairman of Metro’s board of directors.

Faas offered to have the amendment withdrawn, if possible, and acknowledged, “We probably shouldn’t have done it.” Having local lawmakers offer the measure was a way to avoid a prolonged process to change the CON relocation standard, he said.

“We cannot financially tolerate dragging this out,” Faas said.

Yet in taking that route, Metro may have alienated those with whom it has worked most closely on achieving state permission to move.

Horwtiz, for one, takes exception to Metro’s pitting interests in West Michigan and southeast Michigan against each other.

“We’re a statewide organization, not a southeast Michigan one,” he said. “It is a terrible, unhelpful effort to try to stir up hostilities between West Michigan and southeast Michigan. Despite those comments, and despite Metro’s two-pronged process, we still stand ready to move forward on this.” 

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