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Sunday, 27 October 2013 22:00

Growth Spurt: Mary Free Bed to acquire 39 beds for $5.1 million from Hastings hospital

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Mary Free Bed was going to keep the top floor of its hospital vacant and available for future use, but faster than anticipated growth has the organization now planning to use half of the floor. The build out will accommodate the 39 beds that Mary Free Bed is acquiring from Pennock Hospital in Hastings Mary Free Bed was going to keep the top floor of its hospital vacant and available for future use, but faster than anticipated growth has the organization now planning to use half of the floor. The build out will accommodate the 39 beds that Mary Free Bed is acquiring from Pennock Hospital in Hastings PHOTO: ELIJAH BRUMBACK

Faster-than-expected growth has Mary Free Bed Rehabilitation Hospital now planning to increase bed capacity as it undergoes a $66.8 million expansion and renovation.

Mary Free Bed wants to acquire 39 licensed beds from Pennock Hospital in Hastings for $5.1 million, according to a letter of intent filed with the Michigan Department of Community Health.

If a subsequent certificate-of-need application earns approval from the department, the bed acquisitions would push Mary Free Bed’s capacity to 119 beds and accommodate a continuation of the high growth rates the rehab hospital has experienced the last two years following the formation of a regional care network.

“The network is working really well. People are asking for ‘Mary,’ so we’ve been jammed full of patients,” CEO Kent Riddle said. “Rather than turn patients away, we’d rather grow the hospital and serve those patients.”

Mary Free Bed needs to acquire the licensed beds from another hospital, since state certificate-of-need rules only allow so many hospital beds within a geographic planning area. Pennock Hospital, with a declining occupancy rate, was the only one in the same planning area that had excess beds that it was willing to sell, Riddle said.

In agreeing to sell the 39 unused beds to Mary Free Bed, Pennock Hospital will reduce its licensed capacity to 49 beds.

The deal comes as changes in health care continue to put a greater emphasis on outpatient care, rather than inpatient care. As a result, Pennock’s inpatient occupancy rate is expected to remain static for many years to come and the hospital opted to reduce its licensed capacity and sell the unused beds, said CEO Sheryl Lewis Blake.

“Health care institutions all across the United States are working to find ways to manage population health in the future and do it in the most cost-effective way possible. We are doing the same, while maintaining Pennock’s emphasis on personalized high quality care,” Lewis Blake said. “By focusing on those services needed by our patients now and in the future, we are developing a model for health care that is appropriate for our community.”

In 2012, the 88-bed Pennock Hospital had an occupancy rate of 33.1 percent, versus 37.8 percent three years earlier, according to state data. As the occupancy rate dips, Pennock Hospital last year initiated a remodeling project to transition to mostly private rooms.

The 80-bed Mary Free Bed, by contrast, has been growing inpatient volumes and recorded a year-to-date occupancy rate of 85.6 percent through the first six months of the 2013 fiscal year that started April 1, Riddle said. That compares with an occupancy rate of 76.4 percent in the 2012 calendar year, more than 60 percent in 2011 when the Mary Free Bed Rehabilitation Network was formed, and 55.8 percent in 2010, according to data from the state Department of Community Health.

The regional rehab network, created in mid-2011, allows Mary Free Bed to offer rehabilitation services to members and provides a new avenue for inpatient referrals to the Grand Rapids facility. Among the network partners are Metro Health Hospital in Wyoming, Mercy Health in Grand Rapids and Muskegon, Lansing’s Sparrow Health, Traverse City’s Munson Health, and Bronson Methodist Hospital in Kalamazoo.

Riddle expects Borgess Health in Kalamazoo to sign an agreement with the rehab network soon.

Mary Free Bed’s high occupancy rate has caused difficulty for staff in managing inpatient admissions. For instance, it’s been tough for the hospital to avoid putting male and female patients together in semi-private rooms, or placing children and adults in the same room, or isolating people with infections.

“Structurally, we are full, and quite commonly now,” Riddle said.

The 39 additional beds will alleviate the logistics issue and enable Mary Free Bed to create a larger pediatrics unit, he said.

The additional beds also will enable Mary Free Bed to form more specialized services. The hospital earlier this year launched an oncology rehab program for cancer patients. It also wants to initiate rehab programs for cardiac/pulmonary patients and people with movement disorders from Parkinson’s disease or multiple sclerosis.

“We need capacity to be able to do that,” Riddle said.

The major expansion and renovation that began last spring at Mary Free Bed’s campus on the edge of downtown Grand Rapids includes a 48-bed skilled nursing home and a six-story patient tower.

The beds from Pennock will go on the fifth floor of the new patient tower that originally was slated to remain vacant and available for future use. The hospital will now build out half of the floor and leave the other half unused for now, Riddle said.

Read 4800 times Last modified on Monday, 28 October 2013 11:08

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