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November 7, 2012

Beaumont, Henry Ford move to merge health care operations

Two major providers of health care in metro Detroit announced plans for a merger Oct. 31, but it’s unclear if any existing facilities will close as a result.

Beaumont Health System, the largest employer in Oakland County, and Henry Ford Health System announced that the two systems signed a letter of intent to merge operations into a $6.4 billion organization.

Bob Ortlieb, spokesman for Beaumont Health System, stressed that both Beaumont and Henry Ford have started a period of exclusive negotiation and due diligence. Any agreements for the new organization are not expected to be complete until mid-2013.

Gene Michalski, CEO for Beaumont Health System, said at a press conference at Beaumont Hospital, Royal Oak, that Beaumont and Henry Ford are “perfect partners because of our shared values, history of innovation and strong leadership in value, quality and safety.”

“Our shared vision is to form a new organization that will develop improved approaches to patient care that will lead the nation in quality outcomes, service, access and reliability,”  Nancy M. Schlichting, CEO of Henry Ford Health System, said at the press conference. “It is a bold and exciting vision that will mean easier, more accessible and more integrated care for our patients. Coming together allows us to create a ‘Pure Michigan’ community-based system that will serve as an engine of innovation and economic development.”

Steve Howard, chairman of the Beaumont Health System board of directors, said that both systems recognized that the way health care is provided, where it is offered, how it is paid for and how it is measured are changing drastically. “Reimbursement for care is declining, the care itself is shifting to more convenient outpatient settings and more emphasis is being placed on keeping people healthy, not just treating them when they are sick,” he said.

If the merger occurs, it would mean greater access to a broad network of medical centers and hospitals throughout Michigan, electronic medical record-keeping, combined expertise of specialists from both systems and the ability to attract the best national and international talent, officials said. For example, Beaumont is a recognized leader in heart and vascular services, orthopedics and surgery, and nursing excellence; Henry Ford is a recognized leader in neurosciences, cancer and  transplants, officials said.

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

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