Proposed legislation in Lansing would streamline the process for North Ottawa Community Health System in Grand Haven, and potentially other Michigan community hospitals, to partner with a larger health system.
Separate bills moving through House and Senate committees would eliminate the need for a second public vote to sell or lease a hospital that was previously transferred from a public authority to another private, nonprofit corporation.
Smaller community hospitals are coping with significantly higher costs from the COVID-19 pandemic, lost revenue from deferred procedures and surgeries, tight reimbursements and staffing shortages.
North Ottawa President and CEO Shelleye Yaklin today urged lawmakers to enact the legislation that would enable the health system to pursue a partner.
“Like many others, our hospital has had its share of financial challenges and the effects of the pandemic further exacerbated our situation. It is imperative that in order to ensure long-term viability and assure access to health care services for the communities we serve, that we partner with a larger health system to realize the economies of scale that such a partnership provides,” Yaklin said in written testimony this morning to the House Health Policy Committee.
In subsequent testimony this afternoon to the Senate Health Policy and Human Services Committee, Yaklin told lawmakers that other small community hospitals in Michigan face the same challenges.
Yaklin did not identify any potential partner for North Ottawa, what the health system is pursuing or when something may occur.
“As we look to the future, the thing that is absolutely most important, and something that we are charged with as a community organization, is ensuring that we’ll be there for the long term and providing an opportunity and a path for us to do that more expeditiously is something that is critical to my hospital and likely to others that will soon be facing the same type of challenges and decision-making,” Yaklin said. “It’s important to us to find partnerships with organizations who can continue to support the mission and the work that we already do and sustain that into the future so that we don’t have any break in service and we can continue to take care of growing areas.”
Introduced early this month, the legislation would enable North Ottawa “to partner with a larger health system more expeditiously,” according to a statement provided to MiBiz that said the health system “continues to explore any and all opportunities that are poised to advance our ability to provide care in the communities we serve.”
“We are committed to keeping our community and other constituents informed as we map out our plans for the future of our health system,” the hospital’s statement said. “Regarding the timing of this legislation, we do think it will benefit health systems of similar size who are facing the need to explore options. We do appreciate an expedited vote so as to avoid a potentially drawn-out voting period that could hinder health systems from being able to move forward with joining other health systems.”
Among a dwindling number of independent health systems in the state, North Ottawa dates back 103 years and at one point was owned by a public authority consisting of six municipalities in northwest Ottawa County. The health system includes the 81-bed acute care hospital.
In June 2018, North Ottawa sold its medical group to Mercy Health, and the two have since sought to collaborate more clinically.
Local voters, by more than a two-thirds majority, in 1996 approved transferring North Ottawa to a private, nonprofit corporation. Under the existing law, North Ottawa would have to go through another public vote to sell or lease the hospital.
Senate Bill 944, sponsored by Sen. Roger Victory, R-Hudsonville, and House Bill 5876, sponsored by Rep. Greg Van Woerkem, R-Norton Shores, would do away with the requirement for a second public vote.
The Senate Health Policy and Human Services Committee could vote on S.B. 944 next week, said Chairman Sen. Curt VanderWall, R-Ludington.