http://ipraudio.interlochen.org/NMH_No_To_Spectrum.mp3
The hospital system based in Petoskey will not be merging with Grand Rapids-based Spectrum Health. Northern Michigan Regional Health System announced today that it has cut off talks with Spectrum. But the hospital is still interested in finding another big player to work with.
Local Control
Northern Michigan Regional CEO Reezie DeVet says talks with Spectrum Healthcare ended amicably for Petoskey, but in the end, Spectrum wanted the local system to give up too much local control.
Long term, there was a question about how Spectrum would decide which healthcare services would be provided in Petoskey, and which services a patient might need to drive downstate to get.
No actual decisions had been made.
"But they talked about how this might be done. And, what we saw was that there was a gap in how we would approach it and what we might consider particularly important, and how they might approach it and what they might use as decision-making criteria," DeVet says. "And we felt that gap was too great to really be able to bridge within an appropriate negotiating parameter."
Still Looking
The Petoskey-based health system's board voted unanimously last week to end discussions with Spectrum about a possible merger, and they informed the Grand Rapids-based health system Monday.
But even with a Spectrum affiliation off the table, there remains larger questions for NMRH, including an aging hospital in Petoskey that needs a drastic makeover, if not a brand-new facility. That will be expensive.
"And in order to do that, probably, to the extent that we would like, we would need to align with a partner that would assist us in being able to access the degree of capital we would need for a project of that size," DeVet says.
So Northern Michigan will keep looking for a larger health system to merge with. DeVet is not naming any other systems as possibilities as of yet.
Munson Continues Talks
In Traverse City, Munson Healthcare remains in talks with Spectrum Health, and Petoskey's decision may play a role in Munson's - albeit a very small one.
The two are traditional competitors. But in the world of hospitals nothing about competition is black-and-white. Even competitors work together, all the time. Munson and Northern Michigan Regional do so with heart attack patients and pediatric care. And the CEOs of both hospitals say that cannot change.
Munson CEO Ed Ness: "Frankly, no matter where Petoskey or Munson ends up with system affiliations, we're going to need to work together. Especially as healthcare dollars become tighter, it's going to force hospitals to work together no matter what their ownership structure is."
For now, Munson is waiting on an outside firm to finish up on its projections about Munson's future growth and challenges. The board will use that information to make its decision about Spectrum.
Talks of a possible merger created a political firestorm for Munson over fears of a loss of local control. Now that Northern Michigan Regional has walked away from a Spectrum affiliation for exactly that reason, the question becomes whether there might be any political fallout for Munson as it attempts to sway the community.
Ness isn't sure: "I think part of our message is they're separate decisions, and Petoskey made their decisions based on their own criteria. And our board will continue to do the same here."