Spectrum, Mary Free bed linkup considered

July 25, 2010
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Mary Free Bed Rehabilitation Hospital and Spectrum Health have been discussing a possible merger or other affiliation, hospital officials confirmed last week.

“Have there been discussions? Yes. Has there been a decision? No,” Mary Free Bed Guild President Julie Ridenour said before declining further comment. The guild owns the Grand Rapids rehabilitation hospital.

Matt Van Vranken, Spectrum Health vice president and president of Spectrum Health Hospitals, said the growing health system approached Mary Free Bed officials with the idea of creating its own rehabilitation program. Spectrum provides some rehabilitation care now, but not to the extent of the post-acute services available both inpatient and outpatient at Mary Free Bed.

“We have a pretty impressive set of post-acute services already in place,” Van Vranken said. “We have been talking about this type of program for the last couple of years. Ten months ago, we met with Mary Free Bed leadership and shared with them our plans. We looked to find ways to be collaborative with them. The door is still wide open for a whole host of opportunities between them.”

Van Vranken stressed that Spectrum has not yet made a final decision on whether to establish its own program.

Mary Free Bed Director of Marketing and Communications Meg Derrer issued a statement on behalf of the 120-year old Grand Rapids institution:

“With the passage of health care reform legislation and the national move to integrated systems of care, we are currently reviewing our strategic options on how to continue to provide the people of Michigan the very best care in rehabilitation. As part of that process we are continuing to talk with local and regional hospitals as well as national experts in rehabilitation services.”

Spectrum also released a statement, noting that Mary Free Bed is a member of the Spectrum Health Regional Hospital Network, which covers a range of cooperative activities from purchasing to patient care.

“Spectrum Health and Mary Free Bed have a long-term relationship and work closely to coordinate rehabilitation care for our patients. Spectrum Health discusses ways to work more closely with many hospitals in our region. The two organizations have a good working relationship.”

An unsigned memorandum being circulated in the health care community via email indicates that Mary Free Bed Guild representatives are hesitant to turn the specialized hospital over to Spectrum Health. Derrer said the memo was not issued by the Mary Free Bed hospital. The memo cites responsiveness to community needs and maintaining provider choice among reasons to remain independent.

According to the memo, Mary Free Bed hired a consultant earlier this year to review its strategy and options in the face of Spectrum’s overtures.

The push toward integration of health care services is occurring nationwide as institutions position themselves for changes in medical reimbursement systems.

Van Vranken said Spectrum is not seeking to compete with neighboring providers.

“If there is a sense that there is an ultimatum, that is not the case,” he said. “It is categorically incorrect. Our goal is not to compete with anyone. It’s basically to create opportunities for us to serve our patients in the best way we possibly can.”

Both health care organizations are nonprofits.

Based on its latest Internal Revenue Service filing, Mary Free Bed revenues for the tax year ending March 31 were $38.2 million, down from $40 million the previous year. It ended the latest tax year with a positive balance of $1 million and $44.4 million in assets.

Spectrum Health’s budget for the current 2011 fiscal year, which started July 1, anticipates revenues of $3.8 billion. At a June public meeting, Spectrum officials estimated the margin for the 2010 fiscal year at $223 million. The system has 960 beds in Grand Rapids and owns one of the area’s major health insurers, Priority Health.

The 80-bed Mary Free Bed Rehabilitation Hospital is owned by the all-female Mary Free Bed Guild, whose members are carrying on the tradition of the women who founded the hospital 120 years ago.

It began in 1891, when a small group of women from Grand Rapids asked people named Mary and those who knew someone named Mary to donate toward dedicating a hospital bed to poor patients. The guild was incorporated in 1911. A facility for children was established in the 1930s, when the hospital was designated by the state to provide pediatric orthopedic services. It also treated many 20th century polio victims. Rehabilitation services for adults were added in the 1960s.

Today, the guild and junior guild have 120 members and Mary Free Bed is a nationally recognized rehabilitation hospital. It provides inpatient and outpatient post-acute services for people who have suffered brain or spinal cord injuries, amputations, strokes, concussions, amyotrophic lateral sclerosis and other illnesses and injuries.

Zeeland Community Hospital recently announced plans to join Spectrum Health’s growing health care umbrella. Earlier this year, Gerber Memorial Hospital in Fremont joined Spectrum. Discussions are still open between Spectrum and Northern Michigan Regional Hospital in Petoskey as well as Munson Healthcare in Traverse City, where the plan has met public resistance. Spectrum also provides management for Mecosta County Medical Center in Big Rapids.

Spectrum also has acquired two large Grand Rapids physician practices recently — West Michigan Heart and Michigan Medical PC — and is recruiting doctors to add to its Spectrum Health Medical Group.

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