On The Road To Recovery

June 14, 2002
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GRAND RAPIDS – The setup simply wasn’t working.

When a person in Grand Rapids required a lengthy stay in a hospital to recover from a serious illness or critical injury, their choices were limited: Transfer to a Muskegon facility or go home. The former option posed significant inconveniences for patients and their families and physicians; the latter choice was outright impractical.

“That was just satisfactory. Not to the patients, not to the physicians and not to the health system,” Kent Community Hospital CEO Laurie Portfleet said of the situation just two years ago, before the hospital changed ownership and altered course to fill a gaping hole in the Grand Rapids health-care market.

Two years after becoming part of Spectrum Health, and eight years after severing ties with Kent County, Kent Community in July became a long-term acute-care hospital, providing a local beds for physicians, Spectrum and other local hospitals to transfer patients who required intensive care for an extended period.

“It keeps patients in the community, first and foremost, that need this level of care,” Portfleet said.

Becoming an LTAC marked the beginning of a larger transformation for Kent Community under the guidance of Spectrum Health, with the hospital’s Fuller Avenue campus earmarked next for outpatient and ambulatory services that would move from the downtown Butterworth campus.

The initial benefit of becoming an LTAC – beyond the obvious convenience for patients and their families - is the freeing up of valuable bed space at Spectrum’s Blodgett and Butterworth campuses for short-term cases. By designation Kent Community an LTAC, Spectrum is better able to focus on complex long-term cases and do it more cost-effectively at a separate location that’s best-suited for that role, said Sharon Buursma, Spectrum’s executive vice president of ambulatory and continuing care.

That then leaves the Butterworth and Blodgett campuses free to do what they do best, Buursma said.

“It really supports our strategy of focusing acute-care hospitals on acute care,” she said.

Designating the hospital as an LTAC is just the first step in Spectrum’s broader plan for Kent Community, which was mired in red ink and looking for a way to survive when it joined the health system in 1999.

Kent Community is now nearing completion of an $8.8 million, 2-year renovation that, when complete, will enable Spectrum Health to relocate some outpatient services from its downtown Butter Campus. That, in turn, will accomplish two goals: Provide Kent Community a new source of revenue that will help to stabilize the facility’s finances; and decentralize medical services and bring them further out into the community.

Kent Community, after facing dire financial times in the late 1990s, is fast becoming a vital part of the Spectrum health system has a far better outlook than ever before.

“We’re really very high on Kent Community,” Buursma said. “It wasn’t just stepping into preserve it. The strategy makes sense for Spectrum Health.”

“It’s a wonderful, accessible space and it’d be a shame not to take advantage of it,” she said.

Today, 146 of Kent Community’s 484 hospital beds are designated for long-term acute-care patients. The remaining 338 beds remained licensed for long-term ad nursing-home services.

One of the state’s largest specialty and geriatric care hospitals, Kent Community was forced into the changes by the financial crisis that beset the health-care industry in the late 1990s.

The hospital in 1999 had recorded three straight break-even years following a $386,000 million deficit in 1995, two years after severing ties with Kent County and venturing off on its own, and losses in excess of $1 million in previous year. Then came the affects of the Balanced Budget Act of 1997 that slashed Medicaid and Medicare reimbursements.

In 1999 Kent Community, even with significant belt-tightening, recorded a deficit of $2 million. With the financial future looking bleak and subsequent larger losses expected, something clearly needed to change, Portfleet said.

“There was no way the reimbursements were adequate to cover costs,” Portfleet said. “Current reality was not sustainable and we realized that.”

So Kent Community, which in 1995 had set out to become more of an integrated part of the local health-care system, sought a partner. The hospital eventually connected with Spectrum, which saw potential for Kent Community.

Helping to preserve Kent Community was also viewed as “the right thing to do for the community,” Buursma said.

Joining the Spectrum system gave Kent Community administrators the opportunity and support needed to break out and make a strategic move. Hospital administrators for years had considered adding LTAC designation and other services, but never had the resources to move forward.

“We had the ideas. We didn’t have the means to do it,” Portfleet said.

The means to move forward came in the way of $6 million that Kent County, which still owns the physical plant and land, gave Kent Community for long-needed upgrades to the hospital as part of the Spectrum Health deal. Spectrum provided the remaining capital needed for the renovation.

Remodeling work on the hospital’s first floor should wrap up by the end of October, Portfleet said. Kent Community and Spectrum Health will then make the final decisions on what outpatient and ambulatory services to relocate.

Among the services discussed for possible relocation are rehabilitation and therapy, Portfleet said.

“We’ve basically got a list of potentials we’ll take and say ‘what makes sense to have here,’” she said. “As much as we can make this locale work for the program and the people, let’s utilize it to meet the needs.”

“We have an excellent locale, easy in, easy out,” she said.

As its mission changes, Kent Community administrators are working to shore up its finances. The $2 million loss in 1999 grew to $5 million 2000. Administrators have cut the expected loss for 2001 to half of last year’s and the hospital is on a path to break-even by 2003, Portfleet said.

While Kent Community has become an important part of the Spectrum Health system, it still needs to stand on its own.

“We need to perform financially and we have a plan that will do that for the future,” she said.

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