Government and Health Care

Saint Mary’s to lose $4M in funding

Hospital will restructure five health centers, which includes closure of one.

November 15, 2019
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Mercy Health St. Mary's
In the last fiscal year, Heartside Health Center served 3,251 unique patients, 3.6% of them uninsured, 22.7% with Medicare and 56.7% with Medicaid. Photo by Justin Dawes

The Mercy Health Saint Mary’s hospital will no longer be the operator of five federally funded health clinics.

The hospital is restructuring five federally qualified health centers after being told the Health Resources and Services Administration will discontinue about $4 million in annual federal funding over the next several months. That’s about half of the funding needed to run the clinics, the other half coming from Mercy Health.

FQHCs provide primary and preventive care regardless of patients’ ability to pay or health insurance status.

HRSA representatives informed Mercy Health it can no longer overlook noncompliance of grant requirements related to clinic governance, according to Dr. Hyung Kim, Mercy Health Saint Mary’s president. Neither the federal requirements nor the health system’s FQHC structure have changed; the federal requirements are just stricter than before, he said.

The grant requires FQHC patients comprise at least half of the board of directors that has fiduciary responsibility for the FQHC. While the clinics do have a board that exceeds that requirement, the hospital board has overseen the fiduciary responsibilities; this would mean that at least half of the hospital board would need to include clinic patients, Kim said.

“As important and as visible as our five FQHCs are, they're really just a small part of the broader ministry. To have the board be disproportionately FQHC patients just would not make sense,” Kim said. “And this is the reason why FQHCs tend not to be a part of larger health systems like ours.”

Instead, the hospital will no longer oversee the clinics and is determining how to restructure or transfer ownership of each one.

Heartside Health Center in downtown Grand Rapids, 359 S. Division Ave., is the only clinic set to close. The clinic will see patients until Dec. 20 and be available to patients by phone until Dec. 30. Patients were notified by mail in early November.

Staff has been working with other local practices to plan for patient transitions and are calling patients, posting fliers in nearby facilities and informing patients who come into the office. Staff is helping all patients choose new providers and transfer medical records.

In the last fiscal year, Heartside Health Center served 3,251 unique patients, 3.6% of them uninsured, 22.7% with Medicare and 56.7% with Medicaid, Mercy Health said.

Kim said there’s a concentration of organizations in that area that all provide health services to basically the same population, including the GVSU College of Nursing Family Health Center, the FQHC Cherry Health and Mel Trotter.

“Because of that concentration of resources, we were confident that our patients' needs would be met,” Kim said. “We've informally had conversations with leaders of all those places about how we can work together to make sure our patients’ needs get met.”

The broader plan for the remaining clinics was developed as part of a formal discernment process on how to move forward with each location. 

“The needs of all of our patients will be met even though one of our five practices will be closing,” Kim said. 

Browning Claytor, 1246 Madison Ave. SE in Grand Rapids, will remain open and continue to serve the South East Community Association and Madison area neighborhoods of Grand Rapids and beyond. The clinic will become a primary care outpatient department operated by the health system’s medical group, Mercy Health Physician Partners.

Clinica Santa Maria, 730 Grandville Ave. SW in Grand Rapids, will remain open and continue to serve Roosevelt Park and neighboring communities.

It likely will do so as part of a different existing FQHC in Grand Rapids, which has yet to be determined. Kim said Mercy Health also would have a presence on the clinic board after it transitions to a new owner.

Mercy Health will continue serving Plaza Roosevelt residents with pharmacy and lab services. 

For “synergy and sustainability,” Mercy Health said dental services may transfer from the present location of Mercy Health Dental Clinic, 781 36th St. SE in Grand Rapids, to Clinica Santa Maria. Whether the 36th Street location will continue operations is yet to be determined, but Mercy Health will offer some dental services in Roosevelt Park, Kim said.

In association with Mercy Health Lakeshore, Sparta Health Clinic, 475 S. State St. in Sparta, will become a rural health clinic operated by Mercy Health Physician Partners. Sparta will continue with its contract to serve migrant workers.

Dr. Kristen Brown, president of Mercy Health Physician Partners, said other organizations are stepping up to make sure patients are served, and Mercy Health is working with them to ensure the outside funding can remain in West Michigan. 

The FQHC that takes on new patients would be able to apply for at least some of the funding that Mercy Health lost, Kim said.

Mercy Health will announce agreements with other organizations as they become official.

Between the separate operations of Saint Mary’s and Muskegon, Mercy Health donates more than $90 million annually toward supporting health care for those who can’t afford it, as well as toward other nonprofits, local economies and surrounding businesses, Brown said. 

Brown said using nearly 10% of those funds to instead operate five clinics would not be the most effective way to enhance health care.

“We have to be the best stewards of our financial dollars, and we can spread more care by partnering in the community,” Brown said.

“The FQHC model isn't a model that Mercy Health can support. We can still live out our mission to serve the vulnerable population. We just can't do it under that structure.”

Brown said the Heartside staff’s “sole purpose” has been to serve the patients at the clinic, and Mercy Health is working with them to help them transition.

“This is a really hard transition for them because they've invested so much,” she said.

The staff is eligible to apply for other positions within the system.

“We are very sad about closing the practice, but we think it's in the best interest of the organization and the community,” Brown said.

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