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Duke LifePoint Eyes Michigan's Upper Peninsula

John Commins, for HealthLeaders Media, March 7, 2012

Muller says MGHS is negotiating from a strong financial position, but also with an understanding of the new challenges for recruiting, service lines, and capital that non-urban, not-for-profits face in a shifting and highly competitive healthcare delivery landscape.

For example, the health system had planned on Medicare reductions of about $55 million over the next decade. A few weeks back, however, they were notified that the reductions would total about $90 million.

"A lot of the companies come in and buy hospitals that are in trouble. We are definitely not in trouble, but I will give our board credit for looking ahead," Muller says. "It's like when you are selling a house. You want a nice house with a good roof. It is, in a way, giving an asset to another company. But what we and our board see is a larger gain for the community in terms of quality and the tax base. Local control is still going to be here because we will keep the board."

While the notion of surrendering community ownership to an out-of-state for-profit company required some adjustment, Muller says the MGHS board "took a leap of faith and changed their whole perception."

"We see many boards that don't take our board's position. A few of them are neighbors. They see the hospital as their asset, but it is really the asset of the patients and the communities," he says. "Not-for-profits lack the capital and the scale that we will have and their communities will suffer."

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