Source: Sherman Publications

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McLaren fight continues
Proponents cite CON conflict of interest

by Andrea Beaudoin

February 05, 2014

Local officials and McLaren executives say they will continue fighting to build a hospital in Independence Township despite legal setbacks and a Michigan State University study finding no lack of hospitals in southeast Michigan.

The proposed $303 million hospital would be built on eight acres of land next to the McLaren Health Care Village campus at Sashabaw and Bow Point Drive.

The Michigan Department of Community Health (MDCH) denied McLaren's bid, based on a Certificate Of Need (CON) recommendation.

The CON process, created by the state to prevent increased health care costs through unneeded beds, is overseen by 11 commissioners appointed by the governor. All members of the committee are in the medical profession.

Independence Township Supervisor Pat Kittle said the CON commission presents a conflict of interest.

As a free market proponent, he said commissioners making the decisions should not be involved in the medical field.

"If decision makers from the big three, GM, Ford, Chrysler got together and told a competitor they could not build a plant, they would be in trouble," said Kittle.

The CON process requires health care entitaes to complete an application to submit and be reviewed by the MDCH.

A study funded by a grant to MSU by the MDCH, concluded there are 835 excess hospital beds in a group of several hospitals in Oakland County. In the entire state of Michigan there were 7,000 excess beds.

One of the lead researchers for the study, Paul Delamater said during his research he discovered any hospital beds built are used, but the study also showed a hospital built in an area not demonstrating a need, like the propsed hospital in Clarkston, may lead to increased health care costs.

Delamater said during his research he found no need for another hospital in the area.

"It's unfortunate," he said. "There's a lot more at stake here than health care."

According to the study, over 9.8 million Michiganians are served by 169 acute care hospitals, with a total of 26,180 hospital beds.

In 2010, there were nearly 1.2 million hospitalizations with over 5.3 million days of hospitals stays. That figure breaks down to 9.5 hospitalizations for every 1,000 people—slightly higher than the national average.

Delamater said he also discovered no resident in southeast Michigan is more than 30 minutes away from a hospital.

CEO Jack Weiner of St. Josephs Mercy Oakland in Pontiac said McLaren should just accept the fact they were denied under CON and move on.

"When they say we don't want them to build another hospital because it threatens us they're right," said Weiner.

"We are all competitors, but I'm playing by the rules and they are trying not to. The reality is St. Joe's serves an uninsured population and McLaren wants to serve the insured."

"I have been very outspoken proponent of the project" he said adding that McLaren is trying to fight the CON process that is in place because it works. They are trying to go around rules that everyone is living with."

Weiner said McLaren just wants to build a hospital in Clarkston for selfish reasons. "Clarkston is an affluent area with more insured and more attractive population."

"If St. Joe's wanted to move some or all of our hospital, we couldn't because it does not meet the CON rules." he said.

Weiner noted that St. Joe's just invested $500 million dollars in the Pontiac hospital.

"We are committed to this area, which is a highly uninsured area, like we have been for more than 100 years, if the CON rules were different may be would decide to move beds and serve a different community."

St. Joe's does not have that option because of the very important CON rules in place.

Weiner also noted that St. Joe's has unused beds, and that hospitalizations in Oakland County has declined over the years.

Weiner also said he believes no new jobs will be created by moving beds from Pontiac to Clarkston and the community and local businesses will end up paying for unused beds.

Weiner said there are many problems with the McLaren proposal.

"The community will pay for infrastructure, business will have to pay for the additional beds and other institutions will have trouble with expansion," he said.

"If this was Texas it might make sense, but our population in Michigan is not growing and people in the community are already served by the many hospitals in close proximity."

"All this is economic greed," he said. "Look at money they have spent to make this hospital work including donations to politicians."

Kittle said Clarkston residents should be angered by the decision and write their lawmakers, and that the decision puts residents at great risk. Kittle said he has expressed his concerns to Governor Rick Snyder and will also write a letter to President Obama over the matter.

Kittle said besides the 1,300 new jobs the hospital would create the growth potential to develop the over 190 acres of undeveloped land on Sashabaw Road is enormous. Over time, the new hospital would lead to spinoff business and have a positive effect on the area.

McLaren's Marketing Executive Kevin Tompkins said the search for a new facility began in 2006.

"We are always looking for growth and expansion opportunities," he said. "Northern Oakland County came up on our radar screen characterized with a lot of demand for health care."

Through market research, McLaren also discovered area consumers had too far to drive for health care.

Tompkins said research data for the area showed a big demand for inpatient and outpatient care coupled with a long drive to get to care facility.

After reviewing market information McLaren decided Northern Oakland County was a promising area in need of an additional hospital—then the acreage on Sashabaw was discovered.

Tompkins said the location was a great area to build health care facilities because the market should a need and because of the close proximity to interstate 1-75.

McLaren got to work

Tompkins said after deciding Northern Oakland County was the place to build, they started looking for property when they found the parcels on Sashabaw.

"Several parcels of land were cut up into multiple lots so we bought all nine and created one large eight-acre plot," he said.

In 2006 McLaren Health Care Village was opened. Tompkins said McLaren broke ground on Phase 1 of the project in 2007 and held a grand opening celebration opening in May 2009.

McLaren's Health Care Village, which houses Clarkston Medical Group, has been extremely successful. "All facilities there are running well ahead of budgets and the demand for health care services is there in Clarkston. We are way ahead in terms of budgeting," Tompkins said.

Pontiac no longer has the population

Tompkins said although Pontiac McLaren Oakland hospital is certified for 400 hospital beds, many remain vacated and staffing is not provided for the unused beds. McLaren has proposed moving 200 beds from Pontiac to the new hospital in Clarkston.

"We are only staffing for 120 beds there in Pontiac," he said. "The need for hospital beds that was once there in Pontiac is not there anymore."

Pontiac is a shadow of what it used to be and those beds are not needed anymore, and they are needed in North Oakland County. There is no acute care center North Oakland County- nothing."

According to the US Census Bureau when the Pontiac hospital was expanded to include acute care around 1975 the population in Pontiac was around 82,000. In the 2010 census, the population has declined to just over 59,000.

Tompkins said there is a lot of misinformation being spread including that Pontiac will lose jobs if the Clarkston hospital is opened.

"There is no staff working for the 280 beds that remain vacated. There are no jobs associated with the empty beds," said Tompkins. "What we want is to be allowed to move those unstaffed empty beds to Clarkston and create state-of- the art jobs and create economic development in Oakland County."

He added that moving the beds will allow McLaren to do a better job of distributing health care services.

The proof that a hospital is needed in Clarkston is there.

"There have been accidents in the area and it took an enormous time to get to the hospital. Those examples is part of how we have worked to prove our case to state of Michigan that there is an unmet need in the area, and a need to move those hospital beds," Tompkins said.

Tompkins added that many competitors do not want McLaren to build a hospital in Clarkston. "They are not interested in the the proposal because it threatens their existing hospitals," he said.

McLaren's bid was rejected again on Dec. 20 when circuit court Judge Coleen O'Brien upheld the Michigan Department of Community Health's (MDCH) decision denying McLaren's request to build a the new hospital.