GRAND HAVEN — North Ottawa Community Health System will become part of Trinity Health Michigan on Oct. 1 when the two health care systems close their planned merger.
Executives announced today that they have signed a final agreement to merge North Ottawa into Trinity Health, ending more than a century of independence for the small Grand Haven health system. Once the deal closes, North Ottawa Community Health System will become known as Trinity Health Grand Haven and 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.
Through the merger, North Ottawa aligns with a major health system in an era when costs are rising rapidly, finances are tight, and recruiting 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 charge very seriously. In today’s age of constant regulatory change and staffing challenges and reimbursement challenges, the best way for us to continue to carry out that mission is to have a very strong partner — and Trinity is that partner,” Shelleye Yaklin, North Ottawa’s president and CEO, said in an interview. Yaklin will remain as president of Trinity Health Grand Haven.
“It allows us to continue to take care of the people that quite honestly we’re honored to take care of,” Yaklin said.
West Michigan foothold
The Livonia-based Trinity Health in turn gets a stronger foothold in the growing northern Ottawa County health care market that’s adjacent to its Muskegon market and offers plenty of opportunity to leverage 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 has 92 hospitals in 22 states with more than 120,000 employees, 5,300 physicians and $4.1 billion in annual operating revenues.
In Michigan, Trinity has 24,000 employees, 2,233 inpatient beds and 5,290 physicians and advanced practice providers.
North Ottawa and Trinity for years have sought to forge deeper ties in the lakeshore market. They formed a strategic alliance in 2016 and Trinity Health two years later acquired North Ottawa’s physician group.
“This is a very natural next step in the evolution of a nice relationship between North Ottawa and Trinity,” Trinity Health Michigan CEO Rob Casalou told MiBiz. “This now shores up access (to care) on the lakeshore and the Grand Haven community and in Ottawa County. Now you have two organizations that can really start to work closely together now in serving that whole part of the community.”
After the deal closes in two weeks, Trinity Health will immediately look at where it can leverage administrative operations to generate cost savings in areas such as human resources, information technology services and finance.
Using Trinity’s purchasing power alone will generate large cost savings for North Ottawa, Casalou said.
“Right out of the gate, when North Ottawa joins Trinity, it gets immediate access to all of our system services. The value of the economies of scale is huge for smaller hospitals like North Ottawa that had to buy everything separately, whether it’s supplies or I.T. services or access to capital, all those kinds of issues now. You tremendously lower the cost to the North Ottawa system by virtue of becoming part of Trinity,” he said.
Clinically, Grand Haven will become part of the joint ventures that Trinity Health Michigan has with University of Michigan Health-West for cancer and cardiac care networks, he said.
“The opportunity to bring those types of expanded services and sub-specialty services out to the lakeshore in a more strong manner is something that is important to all of us here,” Yaklin said.
As well, Trinity Health can use North Ottawa’s surgical capacity for low-acuity procedures now performed in Muskegon where volumes are high and “we are stretched really thin on resources in capacity for surgery,” Casalou said. Some orthopedic surgeons in Muskegon have already been using North Ottawa for procedures, he said.
The merger also allows the two to better coordinate patient referrals between Grand Haven and Muskegon and to look at joint medical services, “as opposed to just this arm’s length referral relationship,” Casalou said.
Another possibility from the merger is basing a long-term acute care unit in Grand Haven, Casalou said. A 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 at the Mercy hospital campus on Sherman Boulevard.
North Ottawa in March signed a non-binding letter of intent with Trinity Health to “discuss the feasibility” of a merger.
State lawmakers in June enacted legislation to accommodate the merger and allow North Ottawa’s to transfer to a new owner without a second public.
In 1996, more than two-thirds of local voters approved transferring North Ottawa from a public authority to a private, nonprofit corporation. The change in the state law eliminated a requirement for another public vote for a subsequent ownership transfer.