Merger on hold for Mecosta County Spectrum Health

December 18, 2008
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A possible merger for Spectrum Health and Mecosta County Medical Center is off the table, but the Grand Rapids-based health system is exploring the possibility of providing some management services to the Big Rapids public facility.

“Considering as volatile as the financial markets are right now, and unpredictable, we did decide we did not want to incur any further debt, and we’ve kind of tabled that for the time being,” Spectrum Health spokesman Bruce Rossman said .

MCMC spokesman Tom Hogenson said Spectrum Health at the end of November “withdrew the offer for merger.” The two had been going through due diligence since the summer, and a fall public hearing in Big Rapids received generally favorable comments.

Rossman said Spectrum Health decided it did not want to incur additional debt.

Hogenson said a merger would have required Spectrum to assume an $11 million obligation for construction completed in 2005 that was approved by voters in a millage election. He said MCMC currently operates with a positive margin.

Rossman said that while merger plans have been sidelined, Spectrum Health is considering “management services and joint ventures” for the hospital in Big Rapids. Spectrum initially spurned MCMC’s inquiries about providing management services and suggested the merger instead, he added.

“We are interested in working closely with Mecosta County,” he said. “We do value them as a partner, so we decided to make an exception and look at some management services.”

Hogenson said while merger discussions are “sort of on hold,” the MCMC hospital board of trustees is planning a February retreat at which management or joint venture options may be on the agenda. He said it’s unclear when the trustees might make decisions about striking a management deal with Spectrum.

MCMC has been managed by a succession of companies, and the last one was Quorom Health Resources, a Tennessee company with an office in Kalamazoo. Since that agreement ended earlier this year, MCMC has kept CEO Sam Daugherty on the payroll, Hogenson said.

He said 75 to 100 people attended a fall public hearing regarding the possible merger of the public country hospital with the private nonprofit Spectrum Health.

“Most people felt this is a time when small, independent hospitals need to look for a relationship that will ensure stability for the long term,” Hogenson said.

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