The two largest health systems in Eastern Michigan, Henry Ford and Beaumont have announced their wedding plans. If the marriage is approved by all the powerful interests involved, the healthcare system will be the largest in Michigan, with 10 hospitals and $6.4 billion in annual revenue.
Let's look at these two powerful families: Beaumont Hospitals owns the largest acute-care hospital in the Detroit market: Beaumont Hospital in Royal Oak, which includes a children's hospital, as well as hospitals in Troy and Grosse Pointe.
Henry Ford Health System, founded in 1915 by auto pioneer Henry Ford, has four acute-care hospitals, 32 primary-care medical centers, the multispecialty Henry Ford Medical Group, and the Health Alliance Plan, a managed care organization with more than 380,000 members.
Combined, the newlyweds would blanket the region from downtown Detroit north to the Flint area and would control a quarter of both beds and annual discharges. That's real power in this relatively unconsolidated market.
The current market leader is Ascension Health, the St. Louis-based Catholic system that is the largest nonprofit healthcare system in the country. Ascension owns two systems in the Detroit region, St. John Providence in Detroit and Genesys Health in Flint. Combined the seven Ascension hospitals account for 18 percent of inpatient discharges and 19 percent of total acute-care beds and would be eclipsed by the combined Henry Ford-Beaumont system.
Nancy M. Schlichting, CEO of Henry Ford Health System, said the two systems want to work toward leading the nation in patient quality outcomes, access and reliability.
And that's what healthcare reform is doing across the United States. Everywhere you look, hospitals systems are desperately seeking partners as they try to cope with the accountability and shared risk the Affordable Care Act is demanding, while trying to deal with a recession and lagging recovery at the same time. This merger will enable both partners to breathe a little easier rather competing in the suburbs north of Detroit, where Henry Ford opened a new hospital in 2009.
-Both systems recognize that the way healthcare is provided today where it is offered, how it is paid for, how it is measured is changing dramatically, Steve Howard, chairman of the Beaumont Health System board of directors, said in the joint release. 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.
Makes you think this Rust Belt couple doesn't think the former Michigan governor's son is going to win the election and repeal Obamacare on day one!
Or maybe the deeper truth is that market and regulatory pushback against skyrocketing healthcare costs, those same forces that led to passage of the ACA, are so strong now that resistance is futile. In the new world of healthcare, it's partner or perish.
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