Focus, Health Care, and Lakeshore

Resisting the consolidation trend among hospitals

Grand Haven’s 95-year-old NOCH has held off overtures from the big hospitals.

April 4, 2014
| By Pete Daly |
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NOCH
Shelleye Yaklin, CEO of North Ottawa Community Hospitals, says there are advantages to operating an independent hospital. Photo by Johnny Quirin

(As seen on WZZM TV 13) Officially, it’s North Ottawa Community Health System, but people in the Grand Haven area know it by its acronym, NOCH.

It’s their hospital, and they want to keep it that way, according to the CEO of the system, Shelleye Yaklin.

“We are neighbors taking care of neighbors,” she said.

Yaklin said NOCH has received overtures from big hospitals “practically since the day I arrived six years ago.” While she said there are no formal offers on the table, “The dialogue exists continually, as I’m sure most community hospitals would tell you.”

She said there are some positives to relationships with large hospitals — “relationships that truly are collaborative, or even partnership-type opportunities, versus ownership.”

According to a Washington Post blog published last year in Kaiser Health News, some health policy experts worry about the current wave of hospital consolidations. Industry analysts at Booz & Co. reported more than 100 hospital mergers and acquisitions in 2012 alone.

The American Hospital Association, in defense of the consolidations, has conducted a study it says shows the national trend has the potential to drive down health care costs. That study showed “only” 10 percent of community hospitals were part of a merger or acquisition from 2007 to 2012, according to CQ HealthBeat.

NOCH is a short-term acute care hospital where the average patient stay is three days or less. The hospital, at 1309 Sheldon Road in Grand Haven, is licensed for 81 beds. However, the overall North Ottawa Community Health System also includes Heartwood Lodge in Spring Lake — an 84-bed long-term care facility; an eight-bed hospice facility and home hospice service; an urgent care center; and an ambulance service.

The NOCHS corporation also offers in-home skilled nursing services and is a supplier of medical equipment for home health care. It also has its own retail pharmacy, Dunewood Pharmacy, in the hospital, and its own physician group, North Ottawa Medical Group, with more than 20 family practice, internal medicine and OB/GYN physicians.

The entire organization employs more than 800 and has annual operating revenue of about $60 million just for the hospital. NOCH is a private, nonprofit hospital that serves all communities in northwest Ottawa County and adjacent communities in southern Muskegon County.

It got its start in 1919 as Elizabeth Hatton Memorial Hospital, founded by contributions from William Hatton, president of Eagle Ottawa Leather Co. Originally located on South Fifth Street, the organization moved to Sheldon Road in 1939 as the Grand Haven Municipal Hospital. Then in 1967, residents of North Ottawa County approved construction of a new hospital at the site, which was renamed North Ottawa Community Hospital.

Yaklin said NOCH may be unique in that its board still has a majority — six of 11 members — who represent the communities it serves, which are the cities of Grand Haven, Ferrysburg and Spring Lake, and the townships of Robinson, Crockery and Spring Lake.

Yaklin said most of the care offered in a traditional community hospital is primary care.

“Eighty percent of what you might need in your life, you can have provided by a community hospital,” she said. That would include typical services such as gall bladder removal, knee replacement surgery, treatment for pneumonia, blood work, a chest X-ray or mammogram — procedures “we do every day,” she said. “We don’t replace your heart. We don’t do organ transplants. We don’t do brain surgery.” 

So why do large hospitals want to absorb small community hospitals?

Noting the “tremendous capital” and resources required by big hospitals in offering advanced procedures, Yaklin said she believes it is “their need to ensure that they have the relationship with the patient, so when they do need those unusual things, (patients) will seek them at their organization.”

“Obviously, they want to be able to control as much of the continuum within health care as possible,” said Yaklin, adding that the revenue generated by routine services also can help offset costs attached to expensive procedures.

Yaklin said large hospitals also may argue that a large organization can better assure the quality of patient care, regardless of whether it’s complex or simple. She suspects their philosophy is that standard care plans and protocols followed by a large organization with many staff physicians can allow improvements in the quality of care.

First, she said, “I would say we have very talented physicians who work within our organization, and it really doesn’t have anything to do with the direct ownership” of the hospital. “Some folks may argue that direct control will help you achieve the results you are looking for, but we like to believe that if you are focused more on the expected outcome and you are working collaboratively within your organization and with the members of your medical staff, you can achieve the very same result or even better.” 

“I also think it’s easier to make changes that affect the patient care in an organization like ours, versus in a large organization. There are less layers, there are less communication issues, and there is, many times, more sense of pride and ownership,” she added.

Yaklin believes, on average, pricing at NOCH is “probably less expensive because we don’t have the same cost structure that the larger ones do.”

In December, North Ottawa Community Health System made an announcement with a headline that went right to the point: “Focus on independence and local control drives change at NOCHS.”

It said NOCHS was “in the midst of a significant transformation designed to sustain the organization’s standing as one of the few remaining independent hospitals in an era of consolidation.” The changes include technology upgrades, expanded services, new construction and ongoing renovations, as well as several high-profile personnel additions.

“Local control has been a critical component in our ability as an organization to adapt quickly to meet the unique needs of our patients, which is why our board of trustees wishes for NOCHS to remain independent,” said Yaklin in the announcement. “They want to make sure that decisions about what kind of health care services are provided for this community continue to be made by this community. Further, they want to guarantee that NOCHS continues to be among the largest employers here, supporting hundreds of skilled jobs, and is able to sustain its multimillion-dollar community benefit investments each year that come in the form of free health screenings and programs, covering uncompensated care, sponsoring local events, and so on.”

NOCH, ranked in the top 10 percent nationally for patient experience in 2012 by HealthGrades, has earned a variety of national awards for exceptional patient care.

Recently, NOCH opened its new facility for home care and hospice nursing services. It added a bariatric clinic offering surgical and nonsurgical weight loss treatments, and invested in state-of-the-art equipment including a Stereotactic Breast Biopsy Unit, as well as a daVinci Surgical HD Si System and SPY Elite Assessment System — both of which NOCHS says are the first and only systems of their kind in West Michigan.

The NOCHS announcement said it was among only 16 percent of community hospitals nationwide to meet the government’s deadline for the implementation of electronic medical records. It is a member of Michigan Health Connect, a network offering shared patient information with other hospitals and clinics across the state.

In addition to infrastructure improvements, the organization is actively recruiting new personnel. During the past three years, NOCHS has added eight primary care physicians and plans for more.

In 2013, Tari Megee, an RN/MSN with 30 years of experience, was named surgical services director, and Dr. Caleb Fleming was named chief of surgery. The organization also recently appointed its first director of advancement, Chris Ostrowski, to lead community engagement and fundraising, and named Dr. Haney Assaad, former chief of staff, to the new role of vice president of medical affairs. His responsibilities include strategic planning and physician recruitment.

“Ultimately, NOCHS was created to provide the best health care services possible for the communities we serve, and that remains our goal to this day,” said Yaklin. “When a patient comes to see us, that’s the only thing they care about. If we can provide them with the best experience possible, and allow them to stay close to home throughout their stay, we know they will continue to support us as we strive to keep health care local.”

It’s not easy, however.

“I have to accomplish the same things at the end of the day” as large hospitals, she said. “I just have less resources with which to do it. That’s one of the most difficult things for community hospitals.”

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