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Northern Ottawa eyes opportunities to merge with Trinity Health

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GRAND HAVEN – When deciding to integrate into the large scale Trinity Health environmental system, North Ottawa Community Health System You likely reap one immediate benefit: a greater ability to attract doctors.

Like most small-town health systems, North Ottawa often cites the difficulty of hiring doctors, especially specialists, due to a small number of patients for many specialties or concerns about future financial stability.

By joining Trinity Health on October 1 when the merger closes, North Ottawa can offer clinicians the ability to practice in nearby markets where Trinity Health operates, ensuring they receive the patient flow and income they desire, along with supporting a large system the health.

“It gives the stability all clinicians want,” said Shelley Yachlin, North Ottawa president and CEO who will remain president of Trinity Health Grand Haven. “When they say they want to consider moving themselves and their families, they don’t want to keep jumping from one organization to another.

“All independent hospitals face the challenge that a doctor might say, ‘Okay, it looks really cool today, but what will it look like in five or ten years? Because when I come, I want to invest myself and my family in the community. Now we have removed the “what if” from the doctors equation. I think we’ll see a huge opportunity for both hiring and retention.”

Executives said last week they had signed a definitive agreement to incorporate North Ottawa into Trinity Health, ending more than a century of independence for the small Grand Haven health system. Once the deal closes, the North Ottawa Community Health System will become Trinity Health Grand Haven and will maintain all existing operations.

The merger includes all of North Ottawa’s operations, including the 81-bed hospital in Grand Haven, the Heartwood Lodge nursing home in Spring Lake and hospice care services.

By consolidating, North Ottawa fits into a major health system in an era where costs are rising rapidly, finances are limited, and hiring and retaining talent has been an increasingly difficult proposition for small hospitals.

“The founders put us here 103 years ago to take care of this community and we take that responsibility very seriously,” said Yachlin. “In today’s era of constant organizational change, staffing challenges and repayment challenges, the best way to continue to carry out this mission is to have a very strong partner — and Trinity is that partner.

“It allows us to continue to care for the people we have the honor to care for quite frankly.”

Foothold West Michigan

Livonia-based Trinity Health, in turn, has a strong position in the growing healthcare market in the neighboring northern province of Ottawa with its presence in Muskegon and offers plenty of opportunities to capitalize on the operations of both.

North Ottawa will become the ninth hospital in Michigan for Trinity Health, whose portfolio also includes Saint Mary’s in Grand Rapids. The Catholic Health System operates 92 hospitals in 22 states with more than 120,000 employees, 5,300 physicians, and $4.1 billion in annual operating revenue.

In Michigan, Trinity has 24,000 employees, 2,233 inpatient beds, and 5,290 physicians and advanced practice providers.

For years, North Ottawa and Trinity have attempted deeper relationships in the lake market. They formed a strategic alliance in 2016, which was followed two years later by Trinity Health’s acquisition of North Ottawa Physicians Group.

“This is a very natural next step in the evolution of a nice relationship between North Ottawa and Trinity,” said Rob Casalo, CEO of Trinity Health Michigan. Maybes. “This now supports access (to care) at the lakeshore and in the Grand Haven community and in Ottawa County. Now you have two organizations that can begin to work closely together in the service of this entire part of society.”

Cost savings

After the deal closes, Trinity Health will immediately consider where it can leverage administrative processes to achieve cost savings in areas such as human resources, IT services and finance.

Using Trinity’s purchasing power alone would bring significant cost savings to northern Ottawa, Casalo said.

“Once out of the gate, when North Ottawa joins Trinity, you get instant access to all of our system services. The value of economies of scale is huge for smaller hospitals like North Ottawa who have had to purchase everything separately, whether it’s IT supplies or services. Or access to capital. You are significantly lowering the cost on the North Ottawa system by virtue of becoming part of Trinity,” he said.

Given the tight labor market and labor shortages in many occupations, the merger will not result in any loss of jobs in North Ottawa’s 650 people, even after some consolidation of management positions.

“There is not a single job or department in any of our hospitals that does not have a small number of employees,” Casalo said. “There will be plenty of opportunities for employees both in Trinity and northern Ottawa to meet at some of these jobs and we desperately need them to meet because we have a lot of open positions.”

Clinically, Grand Haven will become part of the joint ventures that Trinity Health Michigan works with University of Michigan Health-West For Cancer and Heart Care Networks, Casalo added.

“The opportunity to bring these kinds of extended and sub-specialty services to the lakeshore in a more robust way is important to all of us here,” Yachlin said.

In addition, Trinity Health can use surgical capacity in northern Ottawa for low-intensity procedures that are now being performed in Muskegon where volumes are large and “we are very resource-stretched in the ability to operate,” Casalou said. He said some orthopedic surgeons in Muskegon are already using North Ottawa for the procedures.

The merger also allows the two organizations to better coordinate patient referrals between Grand Haven and Muskegon and take a look at joint medical services, “as opposed to a distant referral-only relationship,” Casalo said.

Another possibility from the merger, Casalo said, is to establish a long-term acute care unit in Grand Haven. The 31-bed long-term acute care unit in Muskegon operated by Select Specialty Hospital closed two years ago when inpatient care at the Hackley Campus was consolidated into the campus of Mercy Hospital on Sherman Boulevard.

More mergers in the future

North Ottawa in March signed a non-binding letter of intent with Trinity Health to “discuss the feasibility” of the merger.

State lawmakers in June enacted legislation to accommodate the merger and allow northern Ottawa to transition to a new owner without a second public vote.

In 1996, more than two-thirds of local voters approved the transfer of North Ottawa from a public authority to a private, non-profit corporation. The change in state law eliminated a requirement for another public vote to subsequently transfer property.

North Ottawa is among a dwindling number of Michigan’s independent health systems, whose ranks also include hospitals in Holland and Sturgis.

Brian Peters, CEO of Michigan Association of Health and Hospitals.

“There are only a few small independent hospitals left in Michigan,” said Peters, who expects the consolidation of medium-sized and larger health systems with many hospitals to continue to create a much broader footprint.

“This push to a larger scale will continue and the pandemic has really shown a very bright light on some of the fragility from a financial perspective even in some of our larger organizations in the healthcare ecosystem,” he said. “I expect you will hear more and more about these types of mergers and acquisitions.”