This story on Corewell Health's new Endoscopy Center in Caledonia Township mentions all the usual motivations for satellite facilities, but is mute on perhaps the most important: the recent repeal of Right-To-Work in Michigan workplaces. These small satellite facilities are all separate legal entities which will be a challenge for health care worker unions to organize:
Corewell Health’s outpatient center building spree tops $260M
By Mark Sanchez - February 15, 2024Corewell Health’s plan to build a new surgical center south of Grand Rapids is part of the health system’s broader investments in outpatient facilities totaling well into the hundreds of millions of dollars in West Michigan.
The $15.2 million facility for endoscopy procedures, proposed for acreage in Caledonia Township at 4910 60th Street SE, between Patterson Avenue and Broadmoor Avenue near the Gerald R. Ford International Airport, would become the latest in a string of new outpatient care centers for Corewell Health.
Building on a major ongoing industry trend, the health system has been pursuing major upgrades to outpatient capacity over the last several years, investing more than $260 million in the process. It also has several ongoing projects for rehabilitation, orthopedic surgery, cardiology, in addition to the proposed facility for endoscopy.
Those are the medical services that health systems generally have been moving to lower-cost outpatient settings that are specially designed for those procedures and patients, said Mike LaPenna, a longtime health care consultant and principal of the LaPenna Group Inc. in Grand Rapids.
Drivers of the “huge” trend include the growing pressures on reimbursement payments by health insurers, the need to provide greater access and convenience for consumers, and a push for greater cost transparency to allow consumers to shop for the best price for care, LaPenna said.
Outpatient environments “are really the most efficient environment in which to deliver care” that can adapt quickly to needs, he said.
Developing the proposed Corewell Health Endoscopy Center in southeast Kent County also would give the health system another location in a fast-growing area in metro Grand Rapids “where the houses are going to pop up, and the rooftops and the people with insurance are going to be living,” he said.
“These are purpose-built to do one thing and do it well, and also to escape the hospital cost structure,” LaPenna said. “An outpatient setting that’s purpose-driven, managed to that type of procedure, and localized or located within a nice payer category set of neighborhoods, that’s where you want to be.”
Following patients — and the money
The trend for more outpatient-based care and procedures has been occurring locally and nationally. In BDO’s annual survey of health care CFOs, nearly half said their health system intended to increase investment in 2024 in ambulatory or outpatient projects that include surgical centers, urgent care, and medical clinics. Another 15% said they would look at partnering with a capital provider or operator on an outpatient investment.
Investing in outpatient care centers ranked third in investment plans for 2024 among the 11 priorities cited by the health care CFOs that BDO surveyed in October. Outpatient care ranked just behind home care and specialty medical services such as cardiology, oncology and orthopedics for 2024 investments, according to the BDO survey results.
Chicago-based JLL noted in a 2023 report that outpatient visits to care providers began surpassing inpatient admissions more than a decade ago, “driven by advances in technology, changes in reimbursement, and consumer preference for convenience.”
Medicare payments for outpatient care increased from 28.5% in 2016 to 33.3% in 2021, and “because of this, hospital systems are shifting their care model by developing or acquiring outpatient sites to not lose out on this revenue,” according to JLL.
“Surgeries that previously were inpatient only, such as hip replacements, are now done in ambulatory surgical centers (ASCs). Inpatient admissions have been declining over the past five years while outpatient admissions are up significantly led by increasing volume for spine, orthopedic and vascular care,” according to the JLL report on health care investing.
Responding to needs
Corewell Health filed an application with the Michigan Department of Health and Human Services on Feb. 1 that seeks regulatory approval for the proposed endoscopy center. The 12,813-square-foot center would have one endoscopy operating room, plus four procedure rooms.
Estimated project costs include $3.5 million for clinical areas and $1.5 million for non-clinical spaces, plus $2.6 million for equipment and $6.3 million for a 10-year lease with CHEC 1 LLC, the corporate entity formed in late December to develop the outpatient center, according to the filing to the state.
“As part of our ongoing plans to provide patients and our community with care in convenient settings, we are planning to provide outpatient endoscopy services in a newly constructed facility. The new facility would also include additional space that could be adapted to meet future patient needs,” Corewell Health said in a written statement to Crain’s Grand Rapids Business.
Physicians at Corewell Health Grand Rapids Hospitals Endoscopy on Lake Drive SE, off East Paris Avenue, performed 24,679 procedures in 2022, the highest number over a six-year period, according to state data.
The new Corewell Health Endoscopy Center would handle a projected 1,300 cases annually in each of its first two years of operation, according to the certificate-of-need application to the state.
Investments stack up
The endoscopy center is the most recent example of Corewell Health’s significant investment in building a network of outpatient facilities.
Construction continues on a 12-story, 240,000-square-foot outpatient center on Michigan Street, across the street from Butterworth Hospital, on the site of the former Cook Institute.
When opened this fall, the outpatient center will consolidate several primary and specialty medical practices now spread throughout the downtown Butterworth Hospital campus, including Corewell Health’s heart and lung transplant and neurosciences clinics. It will also house clinics now staffed by medical residents and a simulation center for medical training.
The Michigan Street center is part of $151 million in projects announced in 2022 that included new outpatient facilities in Lakeview and Big Rapids that each opened last summer.
Corewell Health also is continuing construction on a $23.2 million, 37,500-square-foot Cardiovascular Surgery Center at Bradford Street NE and East Beltline Avenue. The cardiovascular outpatient center will perform non-emergency diagnostic cardiac catheterization procedures, as well as elective procedures to open and implant stents in blocked arteries, known as percutaneous coronary intervention, or PCI, for low-risk heart patients.
Corewell Health expects to open the one-story Cardiovascular Surgery Center, which will have three cardiac catheterization labs, in early 2025.
There’s also a $37 million, 94,000-square-foot rehab and nursing center at 1226 Cedar St. NE that will open later this year and replace an aging continuing care facility on Fuller Avenue that’s owned by Kent County. The county is in the process of reimagining the location for a new administrative campus, a project that will move some 180 employees out of downtown Grand Rapids, as Crain’s Grand Rapids Business previously reported.
Targeted to open in late spring, Corewell Health’s rehab and nursing facility also will house a kidney dialysis center and acute hospice care.
Additionally, Corewell Health formed a joint venture with Arizona-based Atlas Healthcare Partners for an Orthopedic Health & Performance Center, a 117,000 square-foot-building on East Beltline Avenue that includes orthopedic urgent care, a $15.1 million ambulatory surgery center, physical and occupational therapy and training space. The center will open in the fall.
Other recent investments include the 80-bed, $19.5 million short-term rehabilitation facility on its Leffingwell Avenue NE campus, along I-96 and near Leonard Street and East Beltline Avenue, which opened in early 2023, and the $5.4 million Crane Haven Cancer Care Center that opened this January at Corewell Health Ludington Hospital.
Full disclosure: I will never belong to a union, for multiple reasons.
On the pragmatic side, while working at a unionized hospital I found union officers to be manipulative, hungry for money and power, and sneaky. Their attempts to interfere with clinical practice had a negative influence on quality of care, workplace relationships, and professional autonomy.
Obviously, there is a lot of back and forth on this issue - partisan and otherwise. My personal opinions aside, how will the Right to Work repeal impact Michigan clinicians and healthcare workers?
Bridge Michigan provides an overview, relevant portions excerpted here.
https://www.bridgemi.com/business-watch/michigan-right-work-repeal-what-workers-businesses-need-know
Michigan Right-to-Work repeal: What workers, businesses need to know
February 14, 2024 | Paula Gardner
Michigan workplaces are no longer governed by the Right-to-Work law, as the repeal took effect Tuesday of the decade-long regulation that allowed workers to opt out of paying dues in union-represented jobs but still receive benefits.
Gov. Gretchen Whitmer signed the law on March 24, 2023, months after Democrats won control of the governor’s office, state Senate and state House in the November 2022 election.
Repealing the law became one of the early policy priorities as Democrats eyed taking control of the legislature. The repeal passed along party lines in the House and Senate. The law is one of 142 that took effect Tuesday, three months after the Legislature adjourned. The repeal didn't get enough support to take effect immediately.
Here’s what you need to know.
What is Right-to-Work?
The law, which was approved by Republicans in a lame-duck session in 2012, banned requirements that workers join unions in order to receive their benefits.
<snip>
Who is affected by the change?
Only private sector employees. The repeal did not address the public sector.
However, few changes are expected, according to the Detroit Regional Chamber.
“Businesses that are union shops continue to partner with unions and only a small percentage of union workers opt out of paying dues,” the Detroit chamber said on Tuesday.
What if you don’t want to join a union?
Those in unionized workplaces don’t have to rejoin their union and can still opt out of union membership at any time, according to the Mackinac Center for Public Policy, a free market think tank.
“The primary difference now is that they will have to pay the union agency fees, which often come to 90% of full dues,” the Mackinac Center said on Tuesday.
During Right-to-Work, tens of thousands of Michigan union members opted out of union membership, according to Mackinac Center estimates, a move that cost unions at least $50 million annually in lost dues.
...
A MedPage Exclusive on Detroit St John's Ascension doctor's strike. I'm not sure what to make of the cryptic references to private equity in this article.
Ascension hasn't been associated with private equity, to my knowledge, and it seems unlikely that it refers to the striking physicians.
In any case, money is tight in hospitals since COVID funds dried up.
https://www.medpagetoday.com/special-reports/features/109749
Doctors Strike at Detroit Hospital After Unionizing Last Year
— Emergency physicians, contracted through TeamHealth, have pointed to staffing, quality concerns
Less than a year after voting to unionize, emergency medicine physicians contracted through the private equity-backed staffing firm TeamHealth to work at Ascension St. John Hospital in Detroit walked off the job and onto a picket line.
The one-day strike by members of the Greater Detroit Association of Emergency Physicians occurred Thursday afternoon after the union announced earlier this month that, following "months of negotiations with little progress," the emergency department (ED) physicians and physician assistants at St. John Hospital had voted to strike.
At the time, the union had filed its 10-day notice to strike for unfair labor practices, noting concerns over staffing, working conditions, and quality of patient care.
"I believe there is a sacred bond between physicians and patients that is in direct conflict with the goals of a corporate organization," Michelle Wiener, MD, an emergency physician, stated at the time. "It is sad that it has come to this. This vote to strike shouldn't be necessary."
"The fact that you have an entity that won't even meet our minimum demands only validates the fact that they are prioritizing profits over patient care," she added in part. "But we want to treat and care for patients and we are committed to working with our employer to achieve a resolution to this crisis."
Overall, the "frustration of feeling like we can't do our jobs anymore is what has led to the strike," Wiener told MedPage Today in a phone interview from the picket line, amid honking and cheers from passersby and those who turned out to support the physicians, including nurses and other staff from the hospital, members of Congress, and doctors from several states interested in and inspired by their efforts.
"This is a nationwide problem," said emergency physician John Bahling, MD, speaking from the picket line.
Amid long wait times for care and persistent short staffing, Bahling told MedPage Today that he and other union members are striking to fight for their colleagues, including nurses, as well as patients they serve as emergency medicine physicians.
The American Academy of Emergency Medicine (AAEM) also lent their support for the physicians at St. John Hospital in a letter of concern to hospital leadership about the emergency department contract there.
To date, unionization by emergency medicine physicians has been rare, Robert McNamara, MD, past president of AAEM, told MedPage Today. Now, seeing such efforts within this group is a "red flag" in the specialty of emergency medicine, he said.
Asking why private equity is involved with the nation's emergency departments, which provide care to the most vulnerable patients, he said "private equity is there to make money at a high rate of return."
Indeed, efforts at St. John Hospital are representative of ongoing and broader scrutiny around private equity in healthcare.
Spokespersons for both Ascension and TeamHealth confirmed that the emergency department at St. John Hospital would remain open and operational during the strike.
"The safety and well-being of our patients, visitors, associates, and physicians is our first priority," a spokesperson for Ascension said in a statement provided to MedPage Today in an email. "TeamHealth has a comprehensive contingency plan in place with the hospital that will ensure these contracted provider services, and safe patient care, will be uninterrupted."
In his own emailed statement, Josh Hopson, vice president of communications at TeamHealth, wrote, "TeamHealth's top priorities are delivering high-quality patient care and supporting our frontline clinicians, as they care for our communities 24 hours a day, 365 days a year. TeamHealth has provided clinicians with support and resources for over 40 years, even in the face of material reimbursement pressure from private insurers and Medicare."
"We have negotiated in good faith with the union, and any statement to the contrary is false," Hopson added. "We invite the union's leadership to return to the bargaining table and secure a resolution on reasonable and sustainable terms."
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