Munson reaches out during 'Lunch With Ed'

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Ed Ness Record-Eagle/Jan-Michael Stump

June 29, 2010

CEO fields questions about deal as part of outreach effort

By Bill O'Brien bobrien@record-eagle.com The Record Eagle Tue Jun 29, 2010, 07:23 AM EDT

TRAVERSE CITY — Ed Ness' lunch typically consists of a quick sandwich grabbed at the hospital cafeteria.

But the Munson Healthcare chief's midday meal frequently takes a bit longer these days, and he doesn't eat alone. Small groups representing a variety of community interests regularly join him in a Munson conference room to nosh on boxed lunches and hear Ness explain what's behind Munson's partnership talks with Spectrum Health in Grand Rapids.

Participants' questions are many and varied, but the worries are much the same.

"It's consistent," Ness said. "In the end, they want to be assured that this is going to be a strong part of the community going into the future."

So-called Lunch With Ed sessions are part of Munson Healthcare's jump-started public relations blitz designed to outline its short- and long-range operational and capital needs, and how they could be enhanced through a potential affiliation with Spectrum Health.

Ness is meeting with local service clubs, professional groups and social organizations to talk about the Spectrum deal, the subject of widespread community concern and debate.

"One of the things we've found from this process is that people are very proud of (Munson)," Ness said. "That's one of the things that makes us so successful."

John Gray, president of First Community Bank in Traverse City, called his session last week "very educational."

"I was impressed and learned quite a bit," Gray said.

But he also remains on the fence as to whether a possible Spectrum merger is a good thing for northern Michigan.

"Nothing in my mind is decided, but it was an opportunity to get educated a little more," Gray said. "I think there's still a long way to go."

Ness said Munson's goal is to remain a top 100 U.S. hospital over the next 15 years. His presentation explains how Munson Healthcare serves almost 500,000 residents across more than 11,000 square miles in northern Michigan. Capital needs include a new 100-bed tower and upgrades to its neonatal intensive care and obstetrics units.

Those projects are pegged at around $130 million, part of more than $300 million that Munson has identified as long-term needs.

Munson Medical Center in Traverse City is at capacity on many nights, Ness told a group last week. A recent night saw a dozen patients spend the evening in the hospital's emergency room as they waited for beds to open, he said.

"We are the only hospital in town," Ness said. "We have a higher obligation for beds through many communities, and we're at a point where we need more beds."

Another priority is a new $40 million cancer center, after more than 600 cancer patients left northern Michigan last year to get specialized treatment elsewhere. He also discusses Munson's struggles with shrinking federal Medicare reimbursements, and its growing losses for charity care and unpaid bills that are expected to top $12 million this year.

Spectrum, a $3 billion operation that is one of about 50 U.S. health systems with a AA bond rating, can help close an estimated $100 million gap in Munson's capital plan.

"The question is, what's it going to take to get there and can we do this on our own," Ness said.

Local real estate agent Marsha Minervini has sat in on some of Ness' community input sessions. She said they reflect strong public interest in the merger talks.

"I thought it was a pretty vibrant meeting, a lot of questions," she said.

The sessions are intended to educate the public from Munson's perspective. And Ness said they've also helped him understand community concerns and questions about the Spectrum plans.

"They've been very good for me," Ness said.

Most participants understand that the health care industry is changing rapidly, Ness said, and that Munson also will have to change.

"I do think people walk away with some insights that whatever we do, it's going to be a challenge to do what we're doing today," he said. "Most people agree that staying with the status quo isn't going to get us there."