It looks like Grand Haven Township holds the fate of North Ottawa Community Hospital in its hands. The Township, unilaterally will make a decision about the proposed Health Pointe that will have significant impacts on the North Ottawa community and more specifically on North Ottawa Community Hospital (NOCH).
The proposed Health Pointe will be more than double the size of the Spectrum office building on the north side of Holland. It is far more than a mere office building to consolidate practices of physicians in the Grand Haven area that are employed by the Spectrum Health Medical Group. This facility will be larger than NOCH. It will contain a surgery center and imaging technology like CT and MRI.
In other communities, Spectrum Health has asserted that its facilities come under its non-profit umbrella and qualify for tax exemption. A case from Grand Rapids Township currently is before the Michigan Tax Tribunal, If Spectrum prevails, the other Spectrum facilities also will be tax exempt, providing no return for the municipalities that allow Spectrum’s construction.
Surgery and imaging provide the majority of any hospital’s profits. Procedures done at one facility come at the expense of another that provides the same services. By diverting services and revenue away from NOCH, Spectrum Health and Holland Hospital will financially cripple NOCH and threaten its existence.
Grand Haven Township is only one of the local entities that appoint the majority of the Board of NOCH. It has a fiduciary responsibility to the hospital – a responsibility that legally requires it to look out for the best interests of the hospital. If it is determined that it is in the best interests of the hospital for it to either close or be taken over by another entity, that decision must be made in an open process by all of the entities that are responsible for the governance of NOCH, not just by one. Discussing permits and zoning variances is not such a process.
Spectrum Health is very profitable. During my 42-year career, Butterworth Hospital, Blodgett Hospital and now the merged Spectrum Health have never had a year without an “excess of revenues over expenses” at the end of each year. This excess annually adds to the net worth of the corporation. The excess also comes after fully funding accounts such as depreciation as well as all other expenses such as self-imposed premiums to its Cayman Island subsidiary for malpractice self-insurance.
Spectrum’s profits soon will be affected in another sense. It has taken over hospitals in Greenville, Lakeview, Fremont, Reed City, Big Rapids Ludington and Hastings. Several beds from these facilities have been transferred to Butterworth Hospital, allowing it to increase from about 500 beds to about 900 beds. Many charges at Butterworth are greater than those of the surrounding hospitals. Spectrum Health cannot be in a position of allowing its surrounding subsidiaries to undercut its own pricing in Grand Rapids. Hence the charges within the system soon will be normalized. That alone is why 49 local corporate executives in the Zeeland area asked Zeeland Community Hospital and Spectrum Health to not merge, since they reasoned their favorable prices will disappear.
I understand that the Grand Haven Township officials have expressed a view that the State’s Certificate of Need (CON) system will assure that any services in Health Pointe are needed. Unfortunately, CON does not apply to the office building itself, and CON review for services such as surgery does not address need; rather it concerns absolute minimum use.
If one looks at the existing use of Spectrum’s surgical facilities, it is impossible to say there is a need from more capacity. Spectrum Heath Zeeland averages 2 surgical cases per operating room per day. Holland Hospital averages 3 per day, Blodgett Hospital 2 per day. Similarly, Butterworth Hospital averages 2 surgical cases per operating room per day. Even NOCH averages only 2 per day. There is nothing, except lack of need, to would prevent a well-run operating room from being able to experience 5 to 9 procedures per day, assuming only one shift per day. Generally, more outpatient procedures can be performed that inpatient, and the majority of procedures in today’s hospitals are outpatient procedures. Need certainly does not enter into the Health Pointe picture. Placing surgical and imaging capacity in Health Pointe simply will increase Spectrum’s annual profits.
Once established Spectrum health easily can throw its weight around. Its efforts to undermine Mary Free Bed Hospital are well-known.
The township’s only time to consider the pros and cons of the Health Pointe project are before it is built. This should be in concert with NOCH and the other local governmental entities that a responsible for the well-being of NOCH. To date, it does not appear that such a consideration has been given to this matter.
— Lody Zwarensteyn, former president of Alliance for Health