Metro Health Pans Bed Reduction

July 26, 2002
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GRAND RAPIDS — Metropolitan Health Corp., distancing itself from a previous offer to reduce capacity, will seek approval this fall to replace its entire hospital as part of a plan to develop a suburban medical campus.

In negotiations with business groups earlier this year to secure support for altering state rules governing hospital relocations in Michigan, Metro Health administrators indicated, and even wrote into a business plan a year ago, a willingness to reduce the number of licensed beds for a new facility to 200.

In a preliminary filing this month to the Michigan Department of Community Health, Metro Health indicated it would seek approval to transfer all 238 licensed beds to a new hospital that would cost an estimated $149.6 million to develop.

A reduction in licensed beds, made in response to concerns about excess hospital bed capacity in the Kent County market, was offered as a way to secure support for a needed rule change from the Economic Alliance for Michigan and the Grand Rapids-based Alliance for Health, said Jim Childress, Metro’s vice president for marketing and communications.

Metro Health and the two groups never came to terms on a final deal for altering hospital relocation standards, essentially negating the offer.

“There was talk about it and we never did reach agreement,” Childress said.

Metro Health will follow up its letter of intent to the state with a formal application for a Certificate of Need required to proceed with the project. Childress expects the CON filing to come in September.

The application will offer details of Metro’s case to maintain its current bed capacity, he said.

“We’ll have documentation that justifies 238 beds,” Childress said.

The health system wants to move hospital services 7.4 miles from Metro Hospital’s current site on Grand Rapids’ southeast side to a new suburban hospital campus envisioned for a 150-acre parcel on the Wyoming-Byron Township border.

The project, first unveiled publicly in March 2001, is now on a fast track, with Metro under a deadline to finalize design plans and arrange financing for inclusion in a CON application.

Under a temporary rule change the state Certificate of Need Commission approved in May, Metro Health has until Dec. 31 to file an application with the state and have it deemed complete in order to proceed with a formal review.

The change in the rule, which expires at the end of the year, was designed to offer a narrow window for Metro Health to relocate but not open the door for other hospitals in the state to move away from urban markets with a poor payer mix.

Once the temporary change expires at the end of the year, state rules again limit hospitals from relocating more than two miles from an existing site.

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