Takeover bids often leave providers, businesses in lurch

December 27, 2010
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Spectrum Health and Mary Free Bed Rehabilitation Hospital, little more than one mile from one another in downtown Grand Rapids, made a very public a truce last week, agreeing not to agree on any merger … for now. Spectrum leaders, however, also said they plan to move forward with a $5.3 million investment in a 30-bed acute inpatient rehabilitation program at the East Grand Rapids Blodgett campus, still less than six miles from Mary Free Bed. The Business Journal broke this story in August, and it illustrates the reason for continued escalation in health care costs, born by employers.

Mary Free Bed indeed has record as the leader in rehabilitation services and draws patients from across Michigan. Chief Medical Officer Dr. John F. Butzer told the Business Journal, “We’re confident that our reputation and the sophistication of our services will continue to allow us to be a leader in statewide rehabilitation.” The hospital’s services are accessed by all area hospitals including Metro Health.”

Even as it extends its services to a variety of hospitals, Mary Free Bed has seen declining revenues. Spectrum’s business plan, as reported in August, is dependent upon drawing off patients from Mary Free Bed to fill its unit, even in the face of MFB’s 120-year history of expertise.

The duplication of service cannot be seen as a “service” to this community. Such redundancy creates a machine that must be fed; the physicians, practices and health care centers with expertise in any one area must have patient volume to sustain their business and pay the equipment bills.

It is important to point out that Spectrum has majority ownership of Priority Health, which provides health care coverage to the commercial and Medicaid markets as well as Medicare Advantage plans for those 65 years old and older.

Consumer “choice” in health care is a misnomer; it is often a matter of a physician’s recommendation or is directed by the insurance company.

Spectrum cites “integrated care” as reason to continue its plan, but this seems more a matter of convenience to physicians and staff than rational thought. Quality of care must be the first and only consideration. Spectrum made a point last week of stating it would continue to use MFB’s services, but since it also intends to continue plans to build-out a rehab unit, it would seem to be lip service for the public perception of a truce.

Were the partnerships so famous in this community a part of the rationale, Spectrum would continue to partner with MFB and forget its plan to compete, duplicate services and further escalate health care costs. The business community cannot afford it. Spectrum has already announced its fourth consecutive year of price increases, amounting to another 8 percent in its current fiscal year. Priority increased its pricing by 5 percent.

This amounts to Spectrum’s fight for a dollar — the business owner’s dollar — and a monopolized system free to continue its history of price increases.

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