Traverse City Record-Eagle

Body & Soul

March 22, 2014

3 Michigan health systems consider merging

ROYAL OAK, Mich. (AP) — Three Michigan health systems announced Friday they’re in talks about combining their operations in what would form a $3.8 billion nonprofit health system.

Beaumont Health System, Botsford Health Care and Oakwood Healthcare say they’ve signed a letter of intent and begun negotiations about combining. The new system would integrate their combined eight hospitals and 153 other patient care sites.

The combined health system would seek to improve services for patients as well as improve efficiency, the three organizations said in a statement. It would be governed by a single board.

All three organizations would maintain existing medical school relationships.

“We are three successful health care organizations driven by a shared desire to collectively build upon our success in improving quality, efficiency and value in health care delivery,” Beaumont Chief Executive Gene Michalski said Friday in a statement. “By combining our strengths, resources, experience and capabilities, we’ll be well positioned to meet future health care challenges while expanding access to high-quality, high-value care for patients throughout the region.”

Botsford Health Care operates the 330-bed Botsford Hospital in Farmington Hills. The hospital has 2,500 employees and more than 600 doctors. Dearborn-based Oakwood Healthcare operates four hospitals and has 9,000 employees and 1,300 physicians.

Beaumont has 14,000 full-time equivalent employees and nearly 3,100 doctors. It operates three hospitals, the largest of which is in Royal Oak.

The proposed merger is the second attempt for Beaumont in recent years.

Beaumont’s board and management team developed tenets for a model health care system and in late 2011 started a search for a partner. A letter of intent to merge with Detroit-based Henry Ford Health System was signed in October 2012, but the plan to create a single $6.4 billion nonprofit organization with 10 hospitals fizzled out a few months later.

Henry Ford chief executive Nancy Schlichting told staff in an email then that the health system’s trustees voted to end discussions “because it became apparent that two very different perspectives had emerged for the new organization between Henry Ford and Beaumont.”

Henry Ford employs about 24,000 people and operates seven hospitals. It also operates Health Alliance Plan, a health maintenance and insurance organization.

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