County approves hospital merger

MERGER: Mecosta County Commissioners Eric O’Neil (left) and Art Adleman discuss a merger agreement between Mecosta County Medical Center and Spectrum Health System. (Pioneer photo/Jonathan Eppley)

BIG RAPIDS — With a 5-1 vote, the Mecosta County Board of Commissioners took another step toward merging its community hospital with Spectrum Health System.

Final approval now rests with the federal government.

On Monday, commissioners voted in favor of a merger between the county-owned hospital and the Grand Rapids-based health care system. Under the terms of the agreement, Spectrum would pay Mecosta County more than $8.46 million, which will be used to pay off the outstanding principle of general obligation bonds issued in 2004. The hospital would then become a wholly-owned subsidiary of Spectrum.

“This is probably the most important decision that this board has made in some time,” said Art Adleman, commission chair and member of the transition committee that researched the merger. “This has gone on almost eight years. (The hospital board) has done a terrific job and I can’t thank them enough for their hard work. This has been thoroughly investigated.”

With approval from Spectrum’s board, county commissioners and the hospital board of trustees, the merger only requires final approval from the federal government before the agreement is finalized.

Centers for Medicare and Medicaid Services (CMS) — the governmental branch that administers aid services — currently is reviewing the hospital’s physician contracts. MCMC CEO Sam Daugherty expects the review to be completed by the end of the year.

MCMC and Spectrum began seriously discussing a merger in 2007. Discussions continued throughout 2008 until Spectrum ended merger talks due to the economic downturn. The discussion resumed in 2009.

In May 2012, the hospital board adopted a plan to restructure the hospital’s articles and bylaws in an effort to take advantage of a law that would allow the hospital to merge with a private corporation more easily.

Public Act 331 was signed into Michigan law (December 2010) specifically for Mecosta County. Under the law, mergers between a private nonprofit corporation, like Spectrum Health, and a publicly-owned hospital, like MCMC, become easier.

MCMC then moved to create a separate hybrid corporation that still is a Michigan not-for-profit and still a public hospital.

Commissioner Kevin Courtney was the lone vote against the hospital merger. He feels that the hospital board didn’t vet all the possible options.

“There are two other major players available, Trinity Health and McLaren Health Care. We’re making a major decision and we only listened to one offer,” Courtney said. “There was tunnel vision going toward spectrum. Nothing else was ever seriously considered.

He’s also concerned that Spectrum would build a new facility within the next decade, leaving the current hospital buildings vacant.

“There’s no guarantee that the hospital will stay in its current location in the city of Big Rapids. In fact, if (Spectrum) is a smart corporation, they’re going to be looking at consolidation,” Courtney said. “The contract specifically says that the president of the hospital will investigate ways to consolidate and reduce redundancies between Reed City and Big Rapids.”

Daugherty addressed Courtney’s concerns, noting that other health systems were contacted, but Spectrum was the best fit.

“We looked at Trinity and had several different conversations with them back four or five years ago, but we did not receive a formal proposal,” Daugherty said. “We chose to go the Spectrum route because it just made the best sense for our patients. When our patients need care that we can’t provide, the majority of them go down U.S. 131 to Spectrum. For the most part, our medical staff, hospital employees and patients all have a relationship with Spectrum. We thought it was in the best interests to continue that relationship.”

In other news, Commissioner Dick Wheeler resigned from the commission because he was elected as supervisor in Morton Township earlier this month. He is being sworn in in the new position today. Under law, he cannot hold both positions.

“As a commissioner, I have discovered that Mecosta County is very, very well run,” Wheeler said. “I can take what I’ve learned, what (county officials) have taught me and what I’ve observed serving on different committees to apply it to my new position. It will be challenging, but it will be done and Morton Township will be run very well run organization because of what I learned as commissioner.”

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Posted by Jonathan Eppley

Jonathan Eppley is news editor for the Pioneer. He designs and copy edits the Pioneer daily, and manages staff in the evening. Eppley joined the Pioneer staff in 2010. He can be reached at (231) 592-8357 or at jeppley@pioneergroup.com.

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