Munson Healthcare and Spectrum Health Discussing Possible Long Term Integration

Two of Michigan’s leading health care organizations today announced they are working to come together to deliver regional, quality driven health care in the decades ahead to communities across northern and western Michigan.

Traverse City-based Munson Healthcare and Grand Rapids-based Spectrum Health have signed a non-binding letter of intent that enables the two organizations to discuss how they might combine resources to create the benefits of a larger health care system, while at the same time maintaining a focused, regional approach to the delivery of care.

“Our vision over the past decades has been one of regional, quality driven health care,” said K. Douglas Deck, president and CEO of Munson Healthcare. “We have worked successfully toward this vision for more than 20 years by creating strong, collaborative relationships. Integrating Munson Healthcare and Spectrum Health would be a natural extension of this strategy.”

Combining their resources, Munson Healthcare and Spectrum Health would look for ways to meet challenges in the areas of health care reform and physician recruitment as well as address the rising cost of clinical technology and capital requirements.

“The coming together of our stable and high quality organizations would better position us to handle today’s changing health care environment,” said Richard C. Breon, president & CEO, Spectrum Health. “Most importantly, for patients in western and northern Michigan, this integration would provide consistent, quality care through numerous access points across the regions we serve. We would be able to share best practices and resources that would help make us both stronger.”

The non-binding letter of intent between the two organizations comes at a time of accelerating change in the health care industry. The pressure to contain health care costs is intensifying at the same time that demand for comprehensive, accessible, quality driven care continues to grow.

These factors in turn are requiring greater investment in the infrastructure required to serve greater demand. The combination of two very strong providers such as Munson and Spectrum Health could more effectively meet those demands.

“In approving this letter of intent our board of directors has taken a significant step. Collaboration has been, and will continue to be, the best way to move Munson Healthcare’s mission forward,” said Thomas McIntyre, chair of Munson Healthcare Board of Directors. “In the weeks ahead we look forward to sharing with our communities more information about the opportunities this presents and how well this fits into our vision for the future.”

Based on the letter of intent, the leadership from Munson Healthcare and Spectrum Health will move forward with the due diligence phase of this process.

About Munson Healthcare: Munson Healthcare is a not-for-profit network comprised of owned, jointly-owned, managed and affiliated entities. The owned entities include Munson Medical Center, Paul Oliver Memorial Hospital, Munson Dialysis Center, Northflight, and Munson Mobile Imaging; the jointly owned services are Munson Home Health and Home Services, the Northern Michigan Supply Alliance, Great Lakes Mobile PET, and the Ambulatory Surgery Center. The managed entity is Kalkaska Memorial Health Center. The affiliated hospitals include Mercy Cadillac Hospital, Mercy Grayling Hospital, Otsego Memorial Hospital and West Shore Medical Center. Affiliated entities would not be obligated by any agreement between Munson Healthcare and Spectrum Health. In 2008, Munson Healthcare provided $30 million in community benefit. Munson Healthcare hospitals have distinguished themselves with numerous awards for excellence, including recent Top 100 awards for Munson Medical Center and Mercy Hospital Cadillac and the AHA Quest for Quality Prize for Munson Medical Center in 2008.

For more Munson Healthcare news releases, please visit www.munsonhealthcare.org

About Spectrum Health: Spectrum Health is a not-for-profit health system in West Michigan that offers a full continuum of care through the Spectrum Health Hospital Group, a collection of seven hospitals and more than 140 service sites; the Spectrum Health Medical Group, mmpc® and West Michigan Heart-physician groups totaling more than 400 providers; and Priority Health, a health plan with nearly 500,000 members. Spectrum Health’s 16,000 employees, 1,500 medical staff members and 2,000 volunteers are committed to delivering the highest quality care. The organization provided $111.1 million in community benefit during its 2008 fiscal year. As a system, Spectrum Health has earned more than 100 awards since it was formed in 1997.