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Beaumont and Henry Ford Health systems plan merger

Adrian Clark
A trade group is challenging Michigan's new health claims tax.

Beaumont and Henry Ford Health systems announced plans today to merge into one non-profit health care system.

It’s a blockbuster move that pairs two of southeast Michigan’s three largest health systems.

The two healthcare providers have only signed a letter of intent thus far.

But it’s clear that unless some major hiccup emerges, they’re moving full speed ahead toward a merger.

It would become the region’s largest health care system: with ten hospitals, 200 patient sites, and nearly six-and-a-half billion dollars in operations.

Officials on both sides say larger trends in the health care industry are driving the merger.

Nancy Schlichting is the C-E-O of Henry Ford Health System. She says hospitals are increasingly looked for “economies of scale.”

 “Clearly, one of the opportunities we do have for coming together is to make sure we do have a very efficient model for care. With the kind of payment reductions we expect to see over the next couple of years, it is essential we have a larger platform to spread our fixed costs."

Officials on both sides say the writing is on the wall: a growing emphasis on higher-value, lower-cost health care is pushing the industry toward integration.

Henry Ford Hospital President and C-E-O John Popovich says the move will also help the two systems focus more on broader “population health.”

“Combining these new national leaders in clinical excellence and patient safety will transform our focus from not only healing the sick, but to keeping people and our communities healthy.”

Both C-E-O’s say there are no immediate plans to cut staff or close hospitals.

The letter of intent lays out plans for combining the two systems’ governance, staff, and research structures.

They hope to finalize the deal by early next year.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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