Mark Sanchez: Satisfied as far as the neighbor’s perspective is probably a relative term that will come down to where you sit and how you look at things. But this is something we've been covering this year. Corwell Health is planning this massive new patient tower on the Butterworth campus here in downtown, $1.34 billion, 11 stories. And it's going to go there on Michigan Street next to the Meijer Heart Center.
Now this is going to cause a little bit of disruption for the neighborhood just to the east of the Butterworth campus. The folks at Corewell Health have been meeting with the neighbors and the neighborhood association. Last week they had a couple more sessions and we learned that there's been some tweaks, adjustments, changes. Everybody can decide whether they're significant or not. But basically, some of the changes, there's a field there along Barclay Avenue on the south side of the campus that's kind of a vacant field football and a track area right now. About half of it was going to be taken up by a parking deck. And then the other half would be used for future development.Corewell has made a tweak again to the plans to kind of, instead of a square shaped building, it's going to be rectangular shaped. It'll take up the entire field. But that will allow on the east side of that parking deck to create about a 70-foot-wide open area, green space area that Corewell will landscape and have some walkways and pedestrian pathways there. That creates a little bit of a buffer zone right there up against the neighborhood.
And then the other issue the neighbors have raised is you're going to have a helipad on the top of this new patient tower. Again, right next to the neighborhood. A lot of noise when those Aeromed choppers come overhead and land on top of the hospital there. And so Corwell has repositioned that helipad a little bit, I think about 27 feet to the west. It puts a little more distance between the helipad and the homes right next door.And during that session last week, they were showing some of the sound engineering they've done where what's called the ‘acoustic shadow’ won't be as dramatic on the neighborhood.
So that's a couple of little tweaks they've made to try to lessen the impact on the neighborhood. And this is a project that, boy, Corewell hopes to have some final schematics done within the next month and a half, two months. And come late this year, will start the process to get the zoning and planning approval from the city. Hopes to start construction next year in 2027. There will be some demolition as well going on on that campus. And if all goes well, Corewell looks to open this new patient tower in 2031.
Patrick Center: Let's stick with healthcare but take a closer look at the insurance models. Michigan's attorney general is suing Blue Cross. She's alleging an illegal health insurance monopoly.
Mark Sanchez: Yeah, this is a case brought last week by the attorney general in Michigan, Dana Nessel. It's an antitrust case. She's claiming Blue Cross Blue Shield violates antitrust laws in the state and it's a complaint that was filed in U.S. District Court in Detroit.
And what it comes down to is Blue Cross Blue Shield of Michigan is a dominant health insurance carrier in the state. It has about a 65% statewide market share across its policies. In some cases, it's even higher in individual markets across the state.
Obviously, you have some competition such as Priority Health here in Grand Rapids, but their market share of Priority Health, Health Alliance Plan, and some of the other insurers are relatively small compared to Blue Cross Blue Shield.
And this has been an issue that's been out there for years, that it is the dominant insurer and controls much of the market, a large share of the market. So, the Attorney General is going to court to claim that it's a monopoly, it's an antitrust violation, and to change that.
And Blue Cross Blue Shield, of course, says, look, this is something that's from the legacy of Blue Cross Blue Shield in Michigan, which up until the Affordable Care Act was passed and enacted, I think, 2010, Blue Cross Blue Shield was the insurer of last resort. It had to take anybody and everybody who applied for health coverage. So that allowed Blue Cross Blue Shield to really bulk up over many years, decades, generations to a very large market share in the state. And this is the legacy to it. Blue Cross will also say, well, we're also seeing people, companies, employers, this is market choice. And we do have competition with Priority Health, Health Alliance Plan, and some of the other carriers.
So, this is a case to put in your keep an eye on file in the years ahead. This will probably take some time to litigate. Also, we are all well aware that it's an election year and we will have a new attorney general here in 2027 in Michigan. So, it'll be up to whoever wins and becomes the next attorney general, it'll be up to them to decide whether to continue and pursue this case, this antitrust violation claim against Blue Cross Blue Shield in Michigan. But right now, it's in the court, it's been filed, and it's something to watch in the years ahead to see how this could potentially change the health insurance market in Michigan.
Patrick Center: Does this provide any ammunition for some of the state legislators who have been looking into rising healthcare costs?
Mark Sanchez: This is part of the claim that Blue Cross is so big, it has so much influence.But there's a lot of things that go into that equation of why health insurance is so expensive. You know, we're an unhealthy society, our incidence rates of diabetes, depression, back pain, asthma, cardiovascular disease, cancer, we have incidence rates that are high and drive the claims. We have an aging population. So, you have a higher acuity, a sicker population.Aging population demands more care.
We've seen for a number of years these really expensive drugs coming onto the market, these specialty drugs, and the JLP ones are among those. There's a whole combination of factors that are really driving the health insurance costs higher.
And Blue Cross Blue Shield for a couple of years has been pointing at hospitals and all the health systems in Michigan. We've seen a lot of consolidation in the state over the last decade, you know, Corewell Health being one of them with Spectrum and Beaumont merging a number of years back. That gives the health systems more negotiating power. So Blue Cross claims they've been raising prices and that goes into the equation as well. So just like I said, there's just a whole lot of factors that go into that equation.
Patrick Center: We're talking with Crain's Grand Rapids Business staff writer, Mark Sanchez. You've been following the banking expansions, consolidations. What is the latest?
Mark Sanchez: Well, there's a couple of little things to talk about for developments in the banking market here. First, for anybody who works in downtown, you've seen this office building over the last year on Ottawa Avenue. Independent Bank bought it here a couple of years ago and has done quite a nice renovation and it's now going to become Independent Bank’s corporate headquarters.
Years ago, the bank was based in Ionia, moved the corporate headquarters to Grand Rapids with an office out on the Beltline and now it bought this Fountain Street and Ottawa Avenue building and renovated it, and they decided there at Independent Bank to make it the corporate headquarters. They've moved their commercial lending team over there, their C-suite executives and a lot of other functions. Boy, if you drive down Ottawa, walk down Ottawa, you can't miss it. It's quite a nice job they did. And it brings another corporate headquarters into downtown.
The other thing in the banking market to watch and pay attention to is the Federal Reserve Board last week approved Grand River Bank’s sale to Isabella Bank Corporation up in Mount Pleasant. That's going to go through, should close by the end of this year. The target date is November 2nd.
Grand River Bank is a small bank, has a couple of offices, one over on the east side and one in Grandville where it originated. That deal will go through and close sometime before the end of the year. And what that's going to do is bring Isabella Bank, a new competitor, into the marketplace here in Kent County.
Patrick Center: Crain's Grand Rapids Business staff writer, Mark Sanchez. Thank you so much.
Mark Sanchez: Thank you, Patrick.