Spectrum, Northern Michigan On road to combining systems

March 27, 2009
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The Spectrum Health System could get bigger by the end of 2009, as the largest provider of health care in Grand Rapids announced Thursday that due diligence is beginning to bring Northern Michigan Regional Health System of Petoskey under its umbrella.

“If it continues to make sense, the intention would be to become part of Spectrum Health,” NMRHS President & CEO Tom Mroczkowski said. NMRHS would be absorbed into Spectrum Health in a manner similar to hospitals in Greenville and Reed City, he said.

NMRHS is a $200 million nonprofit health system with the 238-bed Northern Michigan Regional Hospital in Petoskey and its own affiliates, including Hospice of Little Traverse Bay, the Boulder Park Terrace skilled nursing facility, VitalCare, which provides home health care and durable medical equipment, the 10-doctor practice Michigan Heart & Vascular Specialists and the Community Free Clinic, which provides $500,000 annually in free care to the needy. NMRHS also partners with Mackinac Straits Hospital in St. Ignace and health centers on Beaver and Mackinac islands.

Mroczkowski said the NMRHS board decided to seek an affiliation with a larger organization as the best way to improve access, quality and cost in the 22 counties it serves. He said talks began with Spectrum Health more than two years ago, after NMRHS posted its strongest financial year ever in 2005.

“As we went through all the various organizations out there, Spectrum kept coming up,” he said. “We would be able to take advantage of system benefits where those make sense, yet still retain autonomy and apply our local knowledge of the region, with our own board.”

NMRHS already works with Spectrum Health through Helen DeVos Children’s Hospital’s Partners in Children’s Health as well as Value Health Partners, an eight-hospital collaborative focused on community health, quality and advocacy.

“Part of the criteria, if we were going to do this, it should be…the biggest and the best. Going a little bit farther makes a huge difference,” he said.

Mroczkowski said he sees advantages for NMRHS in Spectrum’s scope and scale, purchasing power, concentration of clinical resources and talent, its majority ownership of Priority Health and its connection with the Michigan State Medical School in Grand Rapids.

NMRHS survived a bitter nurses’ union dispute earlier in the decade. Mroczkowski said that issue was resolved in 2006, and no employees currently are union members. Spectrum Health spokesman Bruce Rossman said nurses at the Spectrum Health Rehab and Nursing Center at the Kent Community Campus retain some union representation, but they are the only unionized Spectrum employees.

Spectrum’s consolidated budget for the 2009 fiscal year is estimated at $2.3 billon, and it employs 14,000 people. In addition to Blodgett, Butterworth and the Special Care hospitals in Grand Rapids, it has hospitals in Greenville, Kelsey and Reed City.

“In today’s challenging health care environment, collaborative relationships are becoming increasingly important to ensure high quality patients care and financial stability for health care systems,” said Spectrum Health President & CEO Richard Breon. “Regional partnerships can benefit patients by offering a broader range of services, create more opportunities for medical education and physician training, and create efficiencies in care delivery.”

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