Detroit (WWJ/AP) — The eight-hospital Detroit Medical Center signed an agreement Friday that paves the way for it to be bought by a for-profit Nashville, Tenn.-based health company, the two systems have announced.
The nonprofit Detroit health system signed the purchase agreement with Vanguard Health Systems.
The Detroit system and Vanguard in March signed a letter of intent for the sale. Terms include Vanguard making $850 million in capital improvements during the next five years.
Without Vanguard taking over, the Detroit hospital group has said it would not have the money to build new hospitals or upgrade equipment to compete with suburban medical facilities.
Following the signing ceremony Friday morning, WWJ’s Pat Sweeting spoke with DMC President and CEO, Mike Duggan.
How’s he sleeping, now that this step is complete?
“Actually, I went to sleep last night for the first time in in awhile, and yeah, it is great,” Duggan joked.
The deal still requires approval by Michigan Attorney General Mike Cox, a necessary step before a nonprofit hospital can be acquired by a for-profit company. The agreement also needs to conform to state and federal antitrust laws.
“Now this goes int othe hands of the Attorney General — but we geel very confident that any objective legal review will show that an $850 million investment in the city of Detroit is a great thing for the community,” Duggan said.
“This is a tremendous investment in Detroit, our entire community and across our region and state,” Duggan said.
Detroit mayor Dave Bing strongly backed the sale, and he said Friday it will be good for the struggling city.
“This agreement will bring jobs and improved care for our residents,” Bing said in a statement. “It sends a strong message that Detroit is open for business and that this administration is attracting investment and jobs by restoring trust in City Hall.”
The deal is expected to close by Nov. 1.
Vanguard founder and chairman Charles Martin said his company’s interest in buying the Detroit hospitals grew out of a review of their finances and the conclusion that they had been well managed.
“With the capital that Vanguard and its partners can bring, this medical center can grow and prosper along with the great American city that is its home,” Martin said.
© MMX WWJ Radio, All Rights Reserved. The Associated Press contributed to this report.