Beaumont Health and Spectrum Health say they plan to merge into a single system with 22 hospitals and 64,000 employees. It's a massive shakeup for two of the state's largest health providers.
The new system will be led by Tina Freese Decker, the president and CEO of Grand Rapids-based Spectrum. Beaumont’s current, controversial CEO, John Fox, would leave the organization.
The first board chair will be Julie Fream, the chair of Southfield-based Beaumont. Priority Health, Spectrum's Michigan-based health insurance plan with more than 1 million members, will be part of the new system.
“We have complementary strengths. Our markets do not overlap," Fream said. "And from Beaumont’s perspective, we recognize the value of having a health plan [Priority]."
Freese Decker said that for now, patients and employees should expect little to change. “Since our markets do not overlap, and are distinct, I do not anticipate any closures or loss of jobs at this time," she said.
Freese Decker and other health system leaders declined to put a dollar value on the merger, or discuss how much market share the merged company would have in Michigan. They also did not go into detail about how the merger would drive cost savings for either the organization or patients, with Freese Decker noting only that the arrangement will allow for increased investment in technology, facilities, and research.
"By coming together as an integrated health system with Priority Health, we can do some unique things," said Freese Decker. “So we're reducing costs, we’re improving quality and experience, and overall that impacts the total cost of care.”
Beaumont has tried and failed to acquire or merge with two out-of-state health systems recently, during Fox's tenure. A planned merger with Henry Ford Health System also collapsed in 2013.
But both Beaumont and Spectrum officials say this Michigan-centric deal will be different, and they hope to complete the merger this fall. It is subject to federal regulatory review, as well as a Michigan Attorney General's office review of charitable assets for the two non-profit organizations.
Editor's note: Spectrum Health is one of Michigan Radio's corporate sponsors.