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— A long battle over McLaren Health System’s bid to build a $300 million Clarkston hospital was revived Tuesday in a Senate committee hearing that pitted the construction industry against Michigan’s automakers.

The debate surrounded a new Senate proposal that would change Michigan’s certificate of need law to let McLaren build a 200-bed hospital. Flint-based McLaren has been battling uphill for the go-ahead, through lawsuits and legislation, since its 2012 state certificate of need application was rejected.

The Detroit Three automakers and their unions argued the new hospital would drive up medical costs because there’s a state and local surplus of hospital beds. Builders and their trades unions countered by urging lawmakers to embrace the opportunity for 700 construction and 1,500 health care jobs.

“Not many companies are planning $300 million investments in our state,” said Michigan Building and Construction Trades Council President Zane Walker.

But since occupancy rates at eight area hospitals average 58 percent, it would be an unnecessary investment creating “higher hospital bills in our benefit plans,” said Kathleen Neal, director of Integrated Health Care & Disability at Chrysler Group LLC.

The comments came during a hearing of the Senate Government Operations Committee headed by Senate Majority Leader Randy Richardville, R-Monroe, chief sponsor of the bill. His proposal appears to be on a fast track, although he didn’t hold a vote Tuesday to send it to the full Senate.

The bill would revise the law to exempt from CON rules a new hospital within eight miles of an existing hospital wanting to move some of its beds within a county of 1.2 million to 1.5 million people. It would require construction to start within a year.

The bill’s wording refers to McLaren’s proposed Clarkston hospital. The 12-hospital system maintains that it doesn’t plan to boost the number of Oakland County beds because, in effect, it wants to transfer 200 under-used beds from its 335-bed McLaren Oakland Hospital in Pontiac.

McLaren also notes other hospitals were allowed to expand in Oakland County. St. John Providence Health System was allowed to build a $300 million Novi hospital that opened in 2008, the first new hospital in southeast Michigan in 20 years.

“The only people fighting this are other hospitals with obvious competitive interests,” McLaren President-CEO Phil Incarnati said in prepared testimony. “The so-called Friends of CON have only one tired talking point: The health care market should stay the way it was designed over 30 years ago. I think the buggy whip manufacturers made the same argument 100 years ago to Henry Ford.”

Incarnati says population shifts bolster the need for hospital beds in and near Clarkston while the bed-need at its Pontiac hospital has declined. County Executive L. Brooks Patterson backs the plan as part of his effort to recognize health care as Oakland’s key growth industry.

John Karebian, executive director executive director of nursing practice in the Michigan Nurses Association, countered that sending 200 beds from Pontiac to more-affluent Clarkston “will deepen the divide between the haves and have-nots.” Special consideration for McLaren, he said, “is the clearest case of government picking winners and losers there could be.”

Michigan’s certificate of need law is designed to curtail health care cost inflation by avoiding duplicate facilities located near each other. Opponents of the McLaren bill include other major hospital systems, the Small Business Association of Michigan, Michigan Manufacturers Association, Teamsters and United Auto Workers unions and Blue Cross Blue Shield of Michigan.

gheinlein@detroitnews.com

(517) 371-3660

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