Beaumont, Oakwood And Botsford Hospitals Plan Mega-Merger

ROYAL OAK (WWJ) - It's official: Three well-known Detroit-area hospitals could be joining forces.

Beaumont Health System, Botsford Health Care and Oakwood Healthcare confirmed on Friday that they've have signed a letter of intent and begun exclusive negotiations about combining their operations into a new health care system.

The boards of the three not-for-profit organizations have approved a letter of intent calling for formation of a new, $3.8 billion health system that would combine assets, liabilities and operations under unified executive and board leadership.

If approved, the consolidation -- which was first reported by Crain's Detroit Business -- would create one of the largest health care provider systems in southeast Michigan, and bring an estimated $4 billion in annual revenue.

The new system would integrate their combined eight hospitals and 153 other patient care sites into a comprehensive and collaborative health care network focused on advancing quality of care and access to care for people throughout the region.

According to sources at one of the hospitals, administrators recently ended a decades-long relationship with their emergency services and staffing provider to bring in a new company that will help prepare for a sale.

The three organizations have begun the negotiation of a definitive agreement and due diligence discussions aimed at creating the new, not-for-profit health system.

WWJ and Fox 2 Business Editor Murray Feldman said there's a simple reason why the hospital systems would want to come together as one giant health care provider.

"The healthcare field is changing. Small hospitals find they have to hook up with large hospitals and medical systems in order to survive, and the large systems need to expand their reach into communities where they may not have a huge presence yet," he said. "A lot of it is all about the new healthcare law. More people will have insurance so more people will be getting healthcare."

WWJ's Laura Bonnell hit the streets to find out what people in Metro Detroit think of the potential merger.

"If it's going to bring more jobs in, yes definitely I'm for it. That would be perfect," one woman said.

"I know it's hard to merge like that, putting different hospitals together, but at one point we're going to have to do this," another woman said.

"I think it would be good for the economy, you know, a lot of people don't even know about Botsford Hospital," one man said.

"Beaumont is a heck of a good hospital, but I'm not familiar with the other two so I don't know how the merger would go," another man said.