Health Care and Lakeshore

Health system acknowledges Spectrum’s threat

NOCHS questions its ability to survive if Grand Haven medical facility is approved.

March 11, 2016
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Health Pointe
Health Pointe in Grand Haven, a joint venture between Spectrum Health and Holland Hospital, is designed to be an integrated care campus offering a range of services. Courtesy URS

North Ottawa Community Health System has been serving patients in Grand Haven for more than 100 years, but the hospital is afraid its future could be in jeopardy, due to a new medical facility proposed in the township.

The Health Pointe project is a 50/50 joint venture between Spectrum Health, a Grand Rapids-based health system, and Holland Hospital, an independent lakeshore hospital. It has been going through the approval process with the Grand Haven Charter Township Planning Commission for several months.

On March 14, the project will go before the Grand Haven Township Board for approval, which the planning commission has recommended. The meeting is scheduled for 7 p.m. in the township’s administrative offices, 13300 168th Ave.

If approved, Health Pointe will be a 120,000-square-foot integrated care campus located on 172nd Avenue north of the Meijer store in Grand Haven.

Similar to Spectrum Health’s integrated care facilities in Grand Rapids and Holland, and one soon to open in Ionia, the building will host an array of services under one roof.

Dr. David Ottenbaker, who practices in Grand Haven and is a Health Pointe board member and associate chief medical officer for Spectrum Health Medical Group, said Health Pointe would offer primary care services such as internal medicine, pediatrics and family medicine, urgent care, medical and surgical sub-specialties, MRI, CT and X-ray services, a laboratory and an ambulatory surgery center.

“The providers in that facility will be people who already reside and take care of patients in Ottawa County,” Ottenbaker said. “We are coming together in an efficient manner to provide that integrated, seamless delivery of care.”

Spectrum Health currently has approximately 20 physicians working in the Grand Haven market, serving more than 20,000 patients, according to Ottenbaker.

Members of NOCHS said, while Spectrum already has a presence in the area, up until now that presence has been complementary to the hospital’s services — something it fears will change with Health Pointe.

Jen VanSkiver, chief communications officer at NOCHS, said a big worry for NOCHS are the operating rooms it has learned will be housed in the building for outpatient procedures.

“They are looking to put in as many as four operating rooms and a couple of procedure rooms; that is the same as what we have,” she said.

“In the hospital business, there are things that make money and things that don’t. For instance, knee replacement surgery or a knee scope is a very profitable medical intervention, while (delivering) babies doesn’t make money — in many cases, it often loses money — but that is an important community need.”

Hospitals also have high overhead costs due to the infrastructure necessary to operate.

VanSkiver emphasized whether NOCHS has one inpatient or 50, the cost is the same to turn on the lights, and the emergency department has to be ready for patients and surgery at all times. As a result, the hospital is reliant on procedures that produce revenue to make up for the procedures that don’t to cover its operating costs.

“We have to engage in profit-making ventures to cover the costs if we have low inpatient volume for a day or a week, or to cover the unprofitable services I mentioned. That is how hospitals work.”

If Health Pointe moves in and begins to provide those highly profitable services, VanSkiver said NOCHS is at risk of losing much needed revenue to operate all of the services it currently offers, including services Health Pointe won’t be offering.

Dr. Jack Roossien, chairman of the NOCHS board of trustees, agrees Health Pointe could prove detrimental to NOCHS.

“It will eventually dismantle the ability for the hospital to maintain inpatient care here,” he said. “Without inpatient services here, if you have pneumonia or a surgical procedure that requires a day in the hospital, you’ll have to go to Holland or Grand Rapids.”

Roossien points to the impact Spectrum Health has already had on communities it’s entered.

“Spectrum is very predatory in other venues like Zeeland, Fremont and all the places they’ve moved into,” he said. “Their operational model is to go in and take those resources in a way that helps fund the mother ship in Grand Rapids. They are notorious for this, and the state has been watching them for 20 years.

“More recently, the government has said, ‘You can’t keep buying hospitals; it’s going to be a monopoly.’ Their approach here is to replace the hospital and get around that glitch.”

Roossien anticipates Heath Pointe will result in the reduction of quality and an increase in costs for care, as well as potential job losses in the Grand Haven community if NOCHS can’t sustain its current services.

“Individual practices like family doctors and smaller practices actually have better outcomes because they are more identified with their patients,” he said. “As a system gets significantly larger, like Spectrum, that efficiency goes down and cost goes up.”

Spectrum Health refutes those claims, saying its integrated care campuses are designed to increase quality of care by making services more accessible and patient centered, which it said patients are demanding.

“A lot of what we are doing is taking services already being performed in Grand Haven but bringing them together in an integrated campus to really push the new model of care and collaboration and to deliver a better patient experience,” Ottenbaker said. “This is a patient-centric model. Up to 80 percent of their care can be done in one facility, making it very convenient for the patient and the loved ones.”

Furthermore, he said Health Pointe would capture patients who already are leaving the market.

“A lot of our patients seeking specialty services are leaving Ottawa County to get that care, and we feel strongly the lakeshore should have choice so when they choose not to have care through a local entity, they don’t have to travel outside of that market, and that is what is happening now,” he said. “We really want to keep care local. We want them to have choice.”

He added, “I really don’t think it’s going to have an impact on the local market that has chosen to stay with North Ottawa.”

Michigan does have a system in place meant to prevent the market fracturing NOCHS is concerned Health Pointe will cause.

The Certificate of Need, or CON process, which is housed under Michigan’s licensing department, was designed to prevent unsustainable duplication of services.

“The CON process was put in place to make sure you don’t have unnecessary costly duplication in certain parts of how health care is delivered, but not all parts,” VanSkiver said. “Competition can fracture the marketplace and result in lower quality and higher cost to the detriment in loss of services and jobs.”

CON approval is not necessary for a medical building, however; it’s only necessary for specific services. Ottenbaker did not specify what services might be offered within Health Pointe for which it is seeking or might seek CON approval.

Karl French, Grand Haven Charter Township supervisor, said the CON process and possible duplication of services or oversaturation of services in the marketplace is not something the township could consider in approving or denying the project anyway.

“The CON is something that is considered by the state of Michigan …,” he said. “We have no bearing on that. Whether I agree there is or not, from a legal standpoint, I’m not the person making that decision and I don’t think my board is either. The board’s focus is on the zoning and its application as the PUD application relates to the site.”

He said possible economic impacts on NOCHS also could not factor into the board’s final decision.

“It seems to be a legal opinion that we cannot consider the economic issues that surround this particular topic,” he said. “We have to relate to it from a zoning and land-use perspective. So it’s a tough one.”

Stacey Fedewa, planning and zoning official for Grand Haven Charter Township, said, “If a gas station meets the ordinance and wants to go into a certain location, we can’t say, ‘Well, we have 10 other gas stations here and you might cause harm to their business.’ It’s free enterprise. It’s capitalism.

“The township can’t step in and make requirements like market studies that would show a specific financial impact to other specific businesses. That is outside the township’s purview and this is a zoning decision. As it relates to zoning, they are a medical office building, and what type of medical services they are going to provide in that building doesn’t factor into zoning.”

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