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May 22, 2013

Beaumont, Henry Ford scuttle plans to merge health care operations

By Terry Oparka
C & G Staff Writer

Beaumont Health System and Henry Ford Health System have decided not to merge after both signed a letter of intent to do so in October.

The merger would have combined operations into a $6.4 billion organization, and combined all of the assets, liabilities and operations of Beaumont and Henry Ford under a unified board and executive team, integrating their combined 10 hospitals and 200 other patient care sites.

“We have benefitted greatly from our merger discussions and have great respect for our colleagues at Henry Ford,” said Gene Michalski, president and CEO of Beaumont Health System, in a prepared statement released May 21. “However, we found through our discussions that we are not aligned on how to achieve our vision for a model health system due to differences in our structures and business models.

“We are very grateful to our board members, physicians, nurses, leaders and other professionals who worked very hard during the due diligence process with great professionalism and enthusiasm,” said Michalski.

“This decision was made because it became apparent that two very different perspectives had emerged for the new organization between Henry Ford and Beaumont. As a result, many of the foundational elements in the Letter of Intent, including preserving two academic medical centers in Detroit and Royal Oak, were no longer supported by some leaders at Beaumont,” said Nancy Schlichting, CEO of Henry Ford Health System, in a statement released May 21.

“This due diligence period is exactly for this type of discovery, and we are taking the lessons learned and moving forward in a strong, positive direction. For the 10th consecutive year, the $4.5 billion Henry Ford Health System experienced positive revenue growth and net income in 2012, and we expect to do the same in 2013,” Schlichting said.

Under terms of the merger, both systems would have kept their respective brand names, but the hospital foundations would have combined into a single foundation. Medical staffs at both systems would have been separate. Research programs would have been combined, and collaborative opportunities would have been pursued at the existing medical schools.

The Henry Ford Health System employs more than 24,000 people with seven hospitals and a 150-site ambulatory care network. Beaumont Health System employs more than 14,000 full-time employees with three hospitals and numerous community-based medical centers in the tri-county area.

Beaumont Health System is the largest employer in Oakland County.

You can reach C & G Staff Writer Terry Oparka at toparka@candgnews.com or at (586)498-1054.