Breon On Med School: Not So Fast!

March 19, 2004
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GRAND RAPIDS — As the talk builds about the potential future role of Michigan State University’s medical school in Grand Rapids, Spectrum Health’s chief executive has a reminder for interested parties:

The move first must make good business sense.

To determine that, the region’s largest primary- and tertiary-care provider recently began a due-diligence process to examine the effects of an affiliation with MSU’s College of Human Medicine, which at minimum wants to significantly expand its role in Grand Rapids in the years ahead.

Seeking to temper public expectations locally, Spectrum Health CEO Rick Breon said aligning the health system with MSU’s medical school — while desirable and an “exciting” possibility — is not a foregone conclusion. Among the big questions that need answers are how such a move would affect Spectrum Health’s administrative costs and how well the College of Human Medicine’s faculty of practicing physicians would integrate into the local medical community.

“These are the kinds of discussions we are just getting into,” Breon said.

Breon, in addressing the issue publicly in an interview last week, said he wanted to “throw a little caution” on the matter and remind people that Spectrum Health still needs to analyze whether an affiliation with MSU is financially viable.

“This is not a done deal by any means,” Breon said. “We need to take this a step at a time and make sure this is the right decision.”

“I don’t want this to become a runaway train where people say ‘this is a good thing at any cost.’”

Spectrum Health and MSU administrators have talked for several years about the College of Human Medicine having a larger presence in Grand Rapids, where dozens of medical students annually receive their third- and fourth-year clinical training at Spectrum and Saint Mary’s Mercy Medical Center.

Those discussions “got significant legs” in the last 12 months, Breon said.

MSU is now weighing a significantly enhanced presence in Grand Rapids, with options on the table ranging from eventually offering the entire four-year program here to the medical school’s complete relocation. Many, including Breon, see MSU elevating medical education in Grand Rapids over a period of years, rather than doing a quick relocation that, at best, would represent a massive logistical and financial undertaking.

MSU President Peter McPherson has publicly promised a decision by May and vowed to offer a “win-win” scenario for Grand Rapids and the Lansing area, where political, health care and business leaders worry about the potential effects that may result from a diminished role for the College of Human Medicine in the community.

In Grand Rapids, MSU would benefit by linking with a large health system in Spectrum Health, which has nine hospitals in western Michigan, and a major research center, the Van Andel Institute. MSU also would have a greater ability to tap a generous philanthropic community in Grand Rapids for financial support.

To Spectrum Health, an affiliation with MSU’s College of Human Medicine could help in recruiting physicians, especially sub-specialists, who also want to teach and conduct research.

“This is something that, if done correctly, could be a real win-win,” Breon said.

Yet Spectrum Health needs to balance the benefits of an affiliation with the related internal administrative costs. The question essentially comes down to a basic cost-to-benefit ratio and deciding if it’s worthwhile.

“That’s the question — what the balance is,” Breon said. “It’s going to have to be a judgment call on what’s affordable.”

And affordable means determining how an affiliation with MSU would ultimately affect Spectrum Health’s ability to deliver primary and specialty care at a cost that’s competitive with other large health systems around the state and considered a good value. An analysis that shows the cost of an affiliation as too high could derail the move, Breon said.

“Our goal is to still be a low-cost health system,” he said. “Bringing MSU in here, we still need to say we are a good value.”

Spectrum Health is just beginning to analyze the potential financial implications, and administrators will meet in the coming weeks with the health system’s medical staff. The health system isn’t tied to completing the due diligence and making a decision with MSU’s self-imposed May timeframe.

“We’re going to make the right decision. We’re not going to be hurried into anything,” he said.    

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