Ionia (Mich.) County Memorial Hospital may convert from a city-owned facility to private, not-for-profit ownership under a deal that would create a southern Michigan network stretching from Lansing to Grand Rapids.
The board of the 77-bed hospital voted to negotiate with Grand Rapids' second-largest hospital, Blodgett Memorial Medical Center, and Lansing's dominant network, Sparrow Health System. The hospital would operate under a holding company controlled by an "equal partnership" of the three organizations, said Ionia County Memorial's chief executive officer, Evonne Ulmer.
Ionia County Memorial is the only hospital in Ionia County, which has a population of 60,000. It is between Grand Rapids and Lansing, which are 60 miles apart.
Ms. Ulmer said the hospital wants to open satellites and physician offices, but is restricted by its city charter.
The transfer to private status would eliminate the city of Ionia's potential liability for malpractice and hospital debt and allow the creation of for-profit subsidiaries, according to a news release.
Blodgett has had an affiliation agreement with Ionia County Memorial since 1992 to provide tertiary-level care, physician recruitment resources, management consultation and other clinical services.
The deal would integrate Ionia County's physicians with the larger health systems and bring Sparrow's managed-care product, called Physicians Health Plan, to Ionia County.
It comes at a time when Sparrow's two major competitors in Lansing, Michigan Capital Healthcare and St. Lawrence Hospital, are discussing an affiliation (May 2, p. 38). That would leave the state capital with two major health systems, down from four in 1992.
That year, Michigan Capital was created from the merger of Ingham Medical Center and Lansing General Hospital.
In 1992, the most recent year for which data were available, Sparrow had 47% of inpatient admissions, Michigan Capital's hospitals had 38% and St. Lawrence had 15%.
Mark Holoweiko, director of public relations at Michigan Capital, said it's hoped a letter of intent will be signed in 60 days, but the parties have signed a document that would end talks Dec. 31.
"I think the central issue here is a recognition of the fact that we have approximately 1,240 beds in the Lansing area right now and a projected need for 600 or fewer by the year 2000," Mr. Holoweiko said.
St. Lawrence Hospital is owned by Mercy Health Services, based in Farmington Hills, Mich.