Move Forward On Med School As Partners

November 8, 2004
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Grand Rapids Business Journal in July applauded Grand Action's decision to step into the fray of MichiganStateUniversity's decision to move its medical school to Grand Rapids. Grand Action funded a study by Deloitte Consulting to determine the pros and cons — and true cost — of such a move. Despite the obvious benefits to the growing medical and medical research component of the community, the bill to the community appeared to be exorbitant. Then and now, however, the Deloitte analysis is not about yes or no; it's about how to get it done, and knowing what to expect.

Deloitte's evaluation flat out notes, "A cynical observer might suggest that Grand Rapids was to commit to fund perpetual operating losses — sort of a blank check for whatever (College of Human Medicine) needed — but without any governance rights over the conduct and operation of the school. Although additional costs would undoubtedly be incurred to transfer and transform CHM, it is neither practical nor reasonable to expect that the Grand Rapids community would simply fund operating losses."

The Grand Rapids community is often lampooned for its "conservative" reputation, but we would use the Grand Action/Deloitte study as an example of what is opposite: a business community willing to risk, but one that hedges those risks to make profit. The business leaders of Grand Action have again distinguished themselves.

The study outlines "how to get it done," in phases and with components of obvious methods to provide a revenue stream by which to provide some measure of self-support. Deloitte examined West Michigan's medical strengths and assists in determining how elements of the MSU move might be phased while developing research enterprise revenue streams. Further, such "phasing" would use the community's strengths rather than create an immediate and vast change to health care delivery and competition, and add cost.

Van Andel Institute chairman David Van Andel notes in this week's story, "They believe it's not only a worthy cause but a necessary cause." The analysis notes medical schools "attract and create high-paying jobs in academic, research, clinical and related industries. They attract funding — for research, clinical and other endeavors — from outside the regional area. They represent intellectual capital that creates the environment and ideas necessary to incubate new business ventures. These benefits can be extraordinary…"

The College of Human Medicine and related economic activity is estimated to pump $1.57 billion — billion — into the economy within 10 years; it indicates an increase in personal income of nearly $1 billion in those 10 years and anticipates 2,800 new jobs in that period (and an additional $61 million in sales and local taxes).

The real work begins this week as those with a vested interest and those implicated by the change gather to begin to determine action. Taking the time to get it right is commendable, but the impediments of turf battles should immediately be dismissed to concentrate on communitywide benefit.     

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