DETROIT (WWJ) – Three Michigan hospital systems are in talks to combine their operations — in what would create a nearly four billion dollar non-profit health group.
The CEO’s of Beaumont, Botsford and Oakwood hospitals say the proposed affiliation agreement would create a new parent entity that would allow the three systems to retain their individual medical staffs and existing relationships with medical schools; Oakland University, Michigan State and Wayne State respectively.
Botsford Hospital CEO Paul LaCasse says although the Affordable Care Act is a factor driving hospital efficiency it’s not the overriding issue.
“Improving care and safety, reducing our cost structure, so that we can contribute to affordability, those were the driving factors that brought us together,” said LaCasse.
Oakwood Hospital CEO Brian Connelly says improving patient care and efficiency are driving factors behind the agreement.
“There are things like IT areas where we both have EPIC – there all kinds of purchasing opportunities, where we feel like we can do a lot better – there are other sort of general operational efficiencies,” he said.
Connelly says there are no plans to close any hospitals at this time.
Last year Beaumont Hospital signed a similar letter of intent with Henry Ford Health System but their respective boards scrapped that plan after deciding it wasn’t a good fit.
A definitive agreement for this deal could be in place as soon 90 days.
Federal and state regulators would have to sign off on the deal for it to become final.