Without opposition, the Senate greenlighted legislation designed to “streamline the process” allowing smaller-sized independent hospitals to partner with larger health systems, removing “redundant” barriers created by a 1945 act.

The principal stakeholder behind SB 944 was the North Ottawa Community Health System (NOCHS), which operates an 81-bed hospital in Grand Haven and—near the end of March—entered a non-binding letter of intent to discuss the feasibility of joining Trinity Health, according to a report from the Grand Haven Tribune.

In 1996, the six local municipalities formerly responsible for the NOCHS voted to transition it from the statute of an authority over to a 501(c)(3) organization.

SB 944 aims to eliminate the need for a public vote by authorizing a nonprofit corporation to sell, lease or otherwise transfer a hospital if the terms were approved by a hospital authority.

The termination of one of these hospital authorities could also be approved by a majority vote from its board.

“This legislation will streamline the process to allow North Ottawa to partner with a larger health system. By doing this, they can realize greater economies of scale, benefit from operational and clinical best practices and ensure that health care services are available in the local community for years to come,” said Steven Gilbert – from sponsor Sen. Roger Victory (R-Hudsonville’s) office – during the March 17 Senate Health Policy and Human Services Committee.

Victory represents Ottawa County, where the NOCHS serves more than 17,000 patients annually in its emergency department and an estimated 150,000 individuals within its laboratory department.

“From an inpatient standpoint, we take care of 700-800 people that are in the hospital overnight, and then – of course – from a surgical standpoint, because we have a full complement of surgical services, (there are) hundreds of thousands of people that go through,” said Shelleye Yaklin, the president of the NOCHS.

The next nearest hospital from the NOCHS would be in Muskegon, which could be more than a 26-minute drive for patients.

“During the pandemic especially, there was probably no greater need identified and a recognition of the importance in the role that community hospitals played — to not only be the type of organizations that are on the frontline of providing for testing in the very beginning of the pandemic to vaccinations for our broader community — but also providing that availability,” Yaklin said.

She said during the COVID-19 pandemic, her establishment was not able to transfer patients who were acutely ill or beyond the scope of the typical patient for a community hospital. She said her staff members, and smaller-sized hospital workers from across Michigan, were pushed to rise to the occasion and find creative ways to go beyond their limitations of care.

Because of operational restrictions related to COVID-19, Yaklin illustrated that her independent hospital struggled to generate revenue for several months, while also facing spiked expenses for personal protection equipment and similar sanitation safeguards.

According to a report from Crain’s Detroit Business merging with larger health systems offers smaller-sized hospitals an opportunity to reduce overhead costs and to benefit from the larger system’s cash flow and advantages at the negotiation table.

The legislation was also supported by the Michigan Health and Hospital Association before passing during Senate session.

“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 our long-term viability and preserve 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 a testimonial letter she submitted.

This story courtesy of MIRS, a Lansing-based news and information service.