Spectrum Health Provides Nearly $100 Million in Community Benefit

Spectrum Health provided $98.6 million in community benefit to West Michigan during its 2007 fiscal year (FY). Spectrum Health’s community benefit contribution has grown significantly from $15.5 million in 1997, the year of its inception.

The majority of this amount, $74.3 million, reflects uncompensated Medicaid and Medicare funding. Spectrum Health’s community benefit is also comprised of $24.3 million for community outreach and health improvement programs.

The overall community benefit for FY07 is about $2.1 million less than in the previous year as a result of a slight decrease in uncompensated Medicaid and Medicare funding. However, funding for community outreach and health improvement programs increased $1.6 million in 2007.

The reported community benefit has significantly increased since 2002 as shown below:

FY 2002 – $40.6 million
FY 2003 – $50.7 million
FY 2004 – $72 million
FY 2005 – $87.7 million
FY 2006 – $100.7 million
FY 2007 – $98.6 million

“Providing high-quality care at a low cost remains a priority for us and we are proud of our efforts to help improve the health of our community,” said Richard C. Breon, Spectrum Health President & CEO. “However, the majority of our community benefit dollars are being spent on making up the shortfall in government funding for Medicaid and Medicare patients.”

For every $1 of Medicaid care provided, Spectrum Health is paid just 76 cents. For every $1 of Medicare care provided, it is paid 93 cents.

“We’re pleased this shortfall decreased this year but an overall shortfall of $74 million is still a tremendous burden for us and West Michigan. Health systems throughout the region are struggling with a steadily growing Medicaid population. However, the state continues to reduce the amount it will pay for health care services under this program,” Breon said.

Medicaid and Medicare shortfalls have more than tripled for Spectrum Health since 2001, when the underfunding resulted in a loss of $24 million. This year it accounted for $74.3 million of the nearly $100 million in community benefit.

“Unfortunately it is private insurers, employers and their employees that bear the burden of these Medicaid and Medicare shortfalls,” Breon said. “That cost is shifted to them as a ‘hidden tax’ on the business community. It is critical that health care providers, business leaders and our legislators work together to find a way to equitably fund care for Medicaid patients and the uninsured.”

As part of the community benefit, Spectrum Health dedicates $6 million annually to its Healthier Communities department. Created in 1997, Healthier Communities focuses on removing barriers to care, collaborating with not-for-profit agencies, raising awareness about community health issues and helping people to develop healthier lifestyles. Last year, programs supported by Healthier Communities benefited more than 125,000 underserved people in West Michigan.

“Spectrum Health cares for all who come through our doors. We are the largest provider of indigent care in West Michigan,” Breon said. “Finding ways to deliver care to people in their neighborhoods before they require a trip to the emergency department is important, which is why we have partnered with several groups working toward the same goal.”

For detailed information about Spectrum Health’s community benefit contribution, visit our community benefit page.

Spectrum Health is a not-for-profit health system in West Michigan that offers a full continuum of care through its seven hospitals, more than 140 service sites and 560,000-member health plan, Priority Health. Spectrum Health’s 14,000 employees, 1,500 medical staff members and 2,000 volunteers are committed to delivering the highest quality care to those in medical need. The organization provided $98.6 million in community benefit during its 2007 fiscal year. Spectrum Health has earned more than 50 national awards during the past 10 years.