Spectrum In Merger Mood

August 18, 2006
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GRAND RAPIDS — Spectrum Health has its sights set on bringing physicians and hospitals closer together — starting with Michigan Medical PC.

“We think this would lay the foundations for better relations,” said Richard Breon, president and CEO of Spectrum Health, regarding a merger between the region’s largest health system and one of its largest physicians’ groups.

Breon said Spectrum is also talking to other physicians’ groups and anticipates merging with more in the future. He said they are focusing on the health care organizations that surround the Blodgett and Butterworth campuses.

“We’ve had groups already indicate interest in wanting to learn more,” he said.

At what would then be called Spectrum Health Clinic, patients would receive the same care as at MMPC, but would be better integrated with the Spectrum Health system, including the hospital campus.

“We’re trying to put together a connection,” Breon said.

Dr. James Buzzitta, chairman of the board and managing shareholder of MMPC, said the initial changes would be minimal if the merger is successful.

“I think, in the short run, it would be relatively transparent except for name changes,” he said.

Though other organizations have sent out merger feelers, Buzzitta said the option has not been seriously considered until now.

“We’ve never been interested, usually because it’s never been the right partner or the right model or the right time. But with Spectrum Health, it’s certainly all of the above,” he said.

Breon said the merger would allow the system to integrate technology and work together more concisely to better serve patients.

“I think you’re going to see a reduction in duplicate technology,” he said.

Though he said duplications would be reduced, Breon does not anticipate a reduction in the work force if the merger is approved.

Both the Spectrum and MMPC boards would have to vote on the issue in September. Breon said he expected if the merger is successful, many if not all MMPC physicians would join the new Spectrum Health Clinic.

Buzzitta said he hopes all physicians would stay with MMPC through the merger, but they would have the choice to leave the organization.

“We think it’s a great model and a model for the future, and we’re excited about that,” he said. “The premise is really physicians working with physicians, and physicians working with hospitals to deliver the best possible care and service to our patients.”

“The idea is a very sound idea and lays a good foundation,” Breon said.

Physicians involved would still be able to send their patients to other regional hospitals as well as Saint Mary’s Health Care and Metro Health in Grand Rapids, Breon said. The Spectrum Health Clinic would not have an exclusive agreement with either the Spectrum-owned Priority Health or Spectrum’s hospitals.

“This is not intended to hurt or direct patients one way or another,” Breon said.

If the merger is successful, Breon anticipates there will be 350 to 400 physicians in the new wholly-owned subsidiary, Spectrum Health Clinic. The physicians would not be hospital employees but employees of the clinic.

Breon said the name was chosen after careful consideration and seeing the integrated physician and hospital relationships in places throughout the country, such as the Mayo Clinic.

Lody Zwarensteyn, president of the Alliance for Health, said the merger has the potential to do a lot of good, but also could have a negative connotation for those who are cautious about large organizations.

“By integrating physicians with the hospitals and bringing them together, you can increase the service level dramatically,” he said.

As for the effect it may have on other hospitals, Zwarensteyn said if the merger went through and were to start to take away market share, the other hospitals would have an opportunity to respond with their own decisions.

David Silliven, executive director of the Physicians’ Organization of Western Michigan, said his group has not taken a stance on the issue and won’t until more information is available.

“We’re hoping to have additional dialogue with the leadership of Spectrum Health to hear more about it,” he said.

Silliven said the organization has never been approached about a merger of its own and any suggestion would have to be decided by the physicians.

“The physicians own the organization,” he said. “They would have to decide what is in the best interest of delivering care to patients.”

Zwarensteyn said if Spectrum is successful with the merger and can offer good prices and service, it may be able to make itself into a destination like the Mayo Clinic.

“If that happens, that’s good for everybody.”    

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