Spectrum And United Are Uniting

July 11, 2003
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GREENVILLE — As they negotiate the final details of their pending affiliation, Spectrum Health and United Memorial Health System are already looking at ways to better coordinate the delivery of care.

Administrators at both health systems are working to develop short- and long-term plans for United Memorial, which has 100-bed hospitals in Greenville and Lakeview and has been planning expansions at both facilities.

The planning for any changes that will occur at United Memorial will come from the perspective of how best to improve medical services within the health system’s markets and how it fits with Spectrum Health’s current care network.

For United Memorial, the goal is to identify “what can be offered and what can be enhanced to what they’re currently offering and what can be added” in Greenville and Lakeview, Spectrum Health President and Chief Executive Officer Rick Breon said.

Enhancing medical services at United Memorial can affect Spectrum Health’s Grand Rapids facilities. Providing expanded services in Greenville and Lakeview would alleviate the needs for some patients there to travel to Spectrum Health facilities in Grand Rapids for certain procedures, taking pressure off current facilities that are stretched to capacity, Breon said.

“We’re looking at broader things,” Breon said. “If we can provide the quality of service these people want in Greenville, they’ll stay in Greenville and free up capacity in Grand Rapids.”

The two health systems announced last week that United Memorial would become part of Spectrum Health under a proposed affiliation that both sides hope to commence within two months.

The health systems 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 two years ago.

The affiliation provides Grand Rapids-based Spectrum Health, by far the largest health system in the region, with a new partner in order 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,” Breon said.

United Memorial in return gets to team up with a large, integrated 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 pressures.

“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 United Memorial Health System’s 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 that they have that we can’t afford,” Mogdis said. “We needed a partner such as Spectrum to be able to provide the health care we want to provide.”

United Memorial will retain its name for the immediate future, Mogdis said, as well as its own medical staff, local board of directors and foundation.

The affiliation with Spectrum can become particularly helpful to United Memorial as it continues to target northern Kent County, where the health system owns three physician practices in Cannon Township, Cedar Springs and Howard City. Spectrum’s strong reputation for high-quality medical care should help to draw new business to those medical practices, Mogdis said.

“The Spectrum name will definitely help us,” he said. “I think you’re going to see that as a major push for bringing people here.”

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. The health system employs more than 800 people, with 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 and 1,600 medical staff members, 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 affiliation comes six 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.

High on the agenda once the affiliation takes effect in late September — and neither Breon nor Mogdis see any reason why it won’t — is to overcome a lingering negative perception of United Memorial resulting from the litigation, Breon said.

“Anytime you are embroiled in a lawsuit, a lot of people will ask questions and elect to go elsewhere,” Breon said. “We have to make people know they can get quality care when they go to Greenville. We need to get that message out and make sure it occurs.”

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