June 29 2016 10:10 AM

Move could close facility on Pennsylvania Avenue

Michigan State University and McLaren Greater Lansing officials are in negotiations about building a new hospital on MSU property in the area of Forest Road and Collins Road, southwest of campus, according to numerous sources with knowledge of the talks.

As part of the proposed arrangement, at least part if not all of McLaren's Pennsylvania Avenue Hospital would move to the new location, with the possibility that the hospital that serves south Lansing would close.

In exchange, MSU would have a training hospital for its College of Osteopathic Medicine, which has been ranked as among the top 10 percent in the country for primary care education, among possibly other entities within the College of Human Medicine.

A deal would have advantages for both entities. It would allow McLaren to build a new facility at a location closer to a significant population base in Okemos and East Lansing while also being close to the Jolly and Dunckel roads exit off Interstate 496/US 127, giving it substantial growth opportunities.

For MSU, the strategic partnership would end its designation as one of the few major state universities without its own medical school and near-campus teaching hospital, even though its College of Osteopathic Medicine has arrangements with more than 30 hospitals and health centers, according to its own website.

"This would be a very big deal because it has the potential to shift the balance of power in the Lansing area," said one Lansing health care source, making an apparent reference to Sparrow Health System.

Because of the sensitive nature of the talks, those with knowledge about them declined public comment on how they are progressing.

Officially, MSU and McLaren officials declined to get deeply into the progress of the talks.

MSU spokesman Jason Cody said MSU has "strong relationships with both of its hospital partners in mid- Michigan, McLaren and Sparrow" and that it's in "constant conversations with both of them on how to make those relationships better while improving the health care of the community."

"It would be inappropriate to comment on the specifics or potential outcomes of our ongoing discussions with any one partner," Cody said. "As new initiatives, programs or partnerships are finalized, we look forward to sharing them with the community."

Likewise, the comments from Brian Brown, vice president of planning and marketing for McLaren Greater Lansing, steered clear of the details of the discussions.

"McLaren of Greater Lansing is regularly engaged in a number of discussions with a number of stakeholders in ways we can improve the health and well being of the Mid- Michigan area while spurring economic development," Brown said. "It would be premature to discuss specific discussions with any particular stakeholder at this time."

Sources say talks, which have been in the works for at least six months, are positive.

McLaren is limited by state law from moving its Pennsylvania hospital any farther than two miles in any direction as the crow flies, which the plan on the table meets. The suggested hospital would be on property owned by MSU that is technically not part of the school’s campus.

Any hospital that moves locations has to apply with the Michigan Department of Health and Human Services for a "certificate of need," or CON, a process in which a hospital needs to convince a panel of appointed professionals serving on the CON Commission why there's a need to move the hospital.

However, to even be considered, the hospital move cannot be more than two miles in counties with a population of 200,000 people or more, which applies to Ingham County. To move farther away than two miles would require a change in state law, something McLaren is not interested in embarking on, a source said.

McLaren went to the Legislature to move 200 beds from its Pontiac hospital to a new facility in Clarkston back in 2012 and was met with a less-than-favorable results. Despite the support of then-Senate Majority Leader Randy Richardville, the bill allowing McLaren to move the beds was shot down 11-26 in the state Senate with Republicans being the strong opposition block.

According to another source, a McLaren move to MSU's property would also help it escape the shadow of playing little brother to Sparrow when it comes to hospital care in the Greater Lansing area. Each hospital’s own numbers bear out this dynamic.

McLaren Greater Lansing is licensed by the state for 310 beds and its orthopedic hospital for another 50 for 360. Sparrow's main hospital is licensed for 573. Its St. Lawrence campus is licensed for 50 more and its specialty hospital another 30 for a combined 653, nearly twice what McLaren boasts.

The proposal on the table does not call for additional beds, which would require additional state approval. Outside of that, however, state numbers show that based on its calculations, the Lansing area has 355 too many hospital beds, making it very difficult for any facility to snag more.

According to DHHS spokeswoman Jennifer Eisner, the CON Commission has received no letters of intent for a MSU-McLaren project as of last week.

What isn't known is how a strategic partnership would impact MSU's century-long relationship with Lansing's Sparrow Hospital. In 2010, the two signed an affiliation agreement designed to expand research, medical education and clinical services at Sparrow while giving MSU students the opportunity to fill a health care job.

Sparrow and MSU have worked together on nursing education since 1925. Since 2012, Sparrow and MSU researchers have worked at the Center for Innovation and Research. The two also work together at the region's only Level one Trauma Center and the region's neonatal intensive care unit, among other partnerships.

It's also not known how the arrangement will impact MSU's statewide campus system, which includes arrangements with more than 30 hospitals across the state.

A statement issued by Sparrow about the talks noted the "longstanding relationship" between the two entities, including clinical affiliations with MSU's three human health colleges.

"We look forward to continuing to partner with MSU to ensure timely access to safe, quality care, and memorable patient experiences," reads the statement, which concluded with the line, "Choose Wisely. Choose Sparrow."