Traverse City Record-Eagle


June 24, 2014

3 Michigan health care systems agree to combine

DETROIT (AP) — Three Michigan health care systems announced Monday that they have reached a definitive agreement to combine operations into a new $3.8 billion nonprofit and expect the deal to be completed in the fall.

The boards of Beaumont Health System, Botsford Health Care and Oakwood Healthcare have approved the deal unanimously, the southeastern Michigan health systems announced. In March they said that they were in talks about combining their eight hospitals and 153 other patient care sites.

“This milestone demonstrates our mutual commitment to working together to improve quality, efficiency and value for our patients,” Beaumont President and CEO Gene Michalski, who will serve as initial CEO of the new health system, said in a statement.

“We’ll be able to share and build on our individual successes and will stand stronger together during a time of major transformation in the health industry.”

The health systems said the agreement reflects their common vision to providing high-quality, high-value nonprofit care as well as their community service mission. Under the agreement, the organizations are creating a health system called Beaumont Health.

The hospitals all are in the Detroit area. Dearborn-based Oakwood Healthcare operates four hospitals: Oakwood Hospital-Dearborn, Oakwood Hospital-Southshore, Oakwood Hospital-Taylor and Oakwood Hospital-Wayne. Beaumont’s largest hospital is in Royal Oak and its others are in Troy and Grosse Pointe. Botsford Health Care operates Botsford Hospital in Farmington Hills.

The new organization will have 3,337 hospital beds, 5,000 physicians, more than 33,000 employees and 3,500 volunteers.

The planned combination requires state and federal approvals, and the health organizations said they expect to close the transaction in the fall. Additional details, such executive office locations and updated hospital names, are expected to be determined in the coming months.

The new health system will be governed by a single board and executive leadership structure with representation from the three organizations. Oakwood Healthcare Board Chairman John Lewis will serve as future chairman of the Beaumont Health board.

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



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