The West Shore Medical Center Board of Trustees has approved a final agreement to fully integrate with the Munson Healthcare system and secure an up to $23.5 million investment in health care services for Manistee County.
The Manistee County Board of Commissioners endorsed that agreement today, approving a restructuring plan that allows the hospital to transition from a municipal health facilities corporation to a private nonprofit corporation – a needed legal step.
Under the final agreement, West Shore Medical Center (WSMC) will join Munson Healthcare Cadillac Hospital, Munson Healthcare Charlevoix Hospital, Munson Healthcare Grayling Hospital, Munson Medical Center, and Munson Healthcare Paul Oliver Memorial Hospital as the sixth fully integrated hospital in the Munson Healthcare system. The agreement also includes the ambulance service, medical practices, and outpatient clinics in Manistee, Bear Lake and Wellston currently owned and operated by WSMC.
"Munson Healthcare has been a trusted partner for years, and we share a commitment to delivering health care as close to home as possible," said WSMC Board Chair John Hoch. "This agreement will ensure continued access to local health care in Manistee County for years to come, including continued local oversight of management, medical staff and employees at the hospital, and continued operation of the hospital’s advanced life support EMS ambulance service."
WSMC is currently organized as a municipal health facilities corporation stemming from the county’s land donation that allowed construction of the hospital in 1970. However, no tax dollars are used to support the hospital, and the county does not participate in the hospital’s day-to-day operations.
Under the agreement, Munson Healthcare will become the parent company of the hospital in Manistee and commit up to $23.5 million – subject to final valuation based on WSMC’s fiscal year-end financial statements – for local health care services. This includes significant capital investments to sustain and enhance facilities and services, in accordance with an approved capital plan, and an additional contribution to West Shore Healthcare Foundation to benefit and support continued health care services in Manistee and surrounding communities.
Munson Healthcare also agrees to pay an additional $1.5 million to Manistee County to purchase the land originally donated to construct the hospital in 1970. As a result, the hospital and the county agree to terminate the current 99-year-old lease and transfer the hospital land and facilities to the hospital.
Delivery of and payment for health care continues to change rapidly. It is becoming critical for hospitals to be tightly integrated into a larger health system to remain viable under new accountable care models, emerging bundled payment reimbursement and future responsibilities for population health management.
"West Shore Medical Center and Munson Healthcare share similar culture, values, and a focus on quality, safety, putting the patient first and making health care more efficient and cost effective," said WSMC Trustee Bryan Dunlop, M.D. "Choosing to integrate with a health system where we have that kind of synergy will keep our local hospital and the local economy strong. West Shore Medical Center will also participate in Munson Healthcare’s clinical integration network. By working together using proven protocols and measures, we can improve patient care, decrease cost and demonstrate value.”
Following an announcement to explore a closer affiliation last September, the WSMC Board of Trustees appointed a committee of trustees, administrative staff, physicians and legal counsel to explore options. Munson Healthcare has a 30-year track record working with local hospital boards in northern Michigan to keep health care services close to home. Every hospital in the Munson Healthcare system has a local board with local control and local decision-making.
"We are excited with WSMC Board’s decision to fully integrate with Munson Healthcare," said Munson Healthcare President and CEO Ed Ness. "We know West Shore will add greater value to our system and also bring expertise and ideas that can be shared throughout the system to benefit patients and strengthen health care delivery across all of northern Michigan."
As a part of the proposed integration, WSMC will gain a seat on the Munson Healthcare Board of Directors, while one seat on the WSMC Board of Trustees will be added for a Munson Healthcare representative. WSMC will also integrate administrative/overhead operations and systems with the Munson Healthcare system.
"By recommending our hospital fully integrate with Munson Healthcare, the WSMC Board of Trustees remains focused on positioning our hospital for a continued strong and sustainable future and maintaining the right mix of health care services close to home," Hoch said. "Our Board strongly believes that fully integrating with the Munson Healthcare system will provide the hospital access to the resources needed to realize that goal."
A closing date for the agreement and the beginning of combined operations is expected to be in early 2017, pending the necessary approvals. At that time, the hospital’s name will change to Munson Healthcare Manistee Hospital, reflecting the new level of collaboration and coordination with the health care system. Other entity names will be considered in the months ahead.
Questions and comments about the agreement are valued and encouraged. In Manistee call 231-398-1189 or email info@wsmed.org. In Traverse City call 231-935-2000 or email voicesandviews@mhc.net. Updates will continue to be shared online at westshoremedcenter.org/update.