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DMC, Wayne State split after contract negotiations sour

 Detroit Medical Center, Harper Hospital and Hutzel Woman's Hospital.
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Wikimedia Commons

Detroit Medical Center has abruptly terminated its partnership with Wayne State University School of Medicine, citing what it called Wayne State's “acrimonious” and “transactional” approach to ongoing contract negotiations.


The relationship between WSUSOM and the DMC hospitals co-located with its campus dates back about a hundred years. Conflicts have flared up over the years around contract negotiations and other issues.

DMC began as a non-profit group of affiliated hospitals in 1986. In 2010, Nashville-based Vanguard Health Systems purchased DMC and invested $850 million in expansion and renovation of the now for-profit DMC system. In 2013, Dallas-based Tenet Healthcare bought Vanguard Health Systems.

According to Wayne State, Tenet Healthcare notified WSU President M. Roy Wilson by telephone that it would be dissolving the partnership between the two institutions. The move came after Wayne State University Physician Group imposed a May 15 deadline for finalizing the contract, which they say came after DMC requested an extension for a third time.

“The letter received on April 19, 2018, from WSUSOM leadership threatening to end clinical services coverage and administrative leadership for clinical programs at DMC forced us on a path to protect access to care for our patients and seek alternative partnerships to sustain a world-class academic health care system in Detroit,” wrote DMC CEO Anthony Tedeschi in a press release..

According to Charles Shanley, president and CEO of Wayne State University Physicians Group, contract negotiations were nearly complete. “They had requested a number of extensions, usually around additional due diligence for the value of those services, and we were working with their benchmarks, and we got to the point where we were essentially there, with some minor details to touch up,” said Shanley. However, after two extensions, DMC asked for another extension.

That prompted a letter from the dean setting a deadline for ending contract negotiations.


“That letter was only an appropriate legal response to what we received to be unnecessary delays in the process,” said Shanley. However, according to Shanley, President Wilson received notification “out of the blue” from Tenet Healthcare leadership in Dallas that they decided to dissolve the relationship with Wayne State University and halt contracts with Wayne State University Physician Group.

Shanley said that WSUSOM and Wayne State University Physician Group would continue providing specialized health services and safety net community services irrespective of whether contracts are in place. “We’re not going to let patients get in the middle of it,” Shanley said.

In a letter to faculty and students, Wilson said medical education and residency programs will not be affected by the termination of the partnership. Current residencies will be taught to completion and graduation, and undergraduate students will complete the hospital portion of their education without interruption. Wilson said that the process of unwinding the partnership could take years.

“The thing that’s most disturbing to me is the lack of any clarity from Tenet as to what it is specifically that caused them to pull out so abruptly, and what’s more disturbing to me as a physician, as far as we can tell there is no contingency plan, there is no transition plan. So we’re going to just continue to provide these services and I’ve committed to help them develop a transition plan and work through it,” said Shanley.


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