United Joins Spectrums Fold

July 9, 2003
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GREENVILLE — United Memorial Health System would become part of Spectrum Health under a proposed affiliation that both sides hope to commence within two months.

The two health systems have signed a memorandum of understanding for United Memorial to become a member of Spectrum Health. Essentially representing a merger, the affiliation would follow the same course that Hackley Hospital in Muskegon took when it joined Spectrum Health in two years ago.

The affiliation provides Grand Rapids-based Spectrum Health, by far the largest health system in the region, a new partner with which to grow its presence in Montcalm County and the surrounding counties that United Memorial serves.

“We’re looking at it from a strategic perspective. It’s in a growing area,” Spectrum President and CEO Rick Breon said.

United Memorial in return gets to team up with a large health system that can provide the kind of financial, administrative and medical expertise and resources needed to improve health care services at a time when rural hospitals are under increasing financial pressure.

“When we looked to the future and what the needs of the community are and where the resources are going to come from, we realized we needed to have a partner,” said Franz Mogdis, chairman of the United Memorial Health System Board of Directors. “It’s our view that by being a member of the Spectrum system, that provides us tremendous opportunities to draw on their resources.”

United Memorial Health System consists of two 100-bed acute care hospitals — United Memorial Health Center in Greenville and Kelsey Memorial Health Center in Lakeview — and an 11-physician primary-care practice, Integrated Medical Partners, that includes three offices in northern Kent County. The health system employs more than 800 people, has nearly 200 physicians on staff and posted revenues of about $80 million for the 2003 fiscal year that ended June 30.

Spectrum Health, by comparison, includes seven hospitals with 1,900 beds, 13,200 employees, 1,600 members on the medical staff and posted fiscal year 2003 revenues of about $1.5 billion. Spectrum also owns the AeroMed air ambulance, the health plan Priority Health, and long-term, continuing home care and hospice care units.

The health systems are negotiating the final aspects of the merger, which Breon expects will close in late September.

As that process proceeds, work is already underway to develop short- and long-term strategic plans for United Memorial and how Spectrum Health can enhance service in the Greenville area, Breon said.

The affiliation comes seven months after United Memorial settled criminal fraud charges with the federal government, ending costly litigation that Mogdis said contributed to the health system’s $3 million loss in FY 2003.

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