Spectrum Health and Beaumont Health expect to merge this year

Michigan

GRAND RAPIDS, Mich. (WOOD) — Grand Rapids-based Spectrum Health and Beaumont Health on the southeastern side of the state say they are preparing to merge before the end of the year.

Beaumont, the largest health care system in the state, and Spectrum, West Michigan’s largest health care provider and largest employer, this week signed a letter of intent to begin the process to create a single new system.

The proposed merger will require the approval of government regulators, but Spectrum Health President and CEO Tina Freese Decker said she doesn’t expect any roadblocks in that process. She said the organizations are hopeful they can complete due diligence, integration planning and regulatory review to close by the fall.

Freese Decker said during a Thursday virtual press conference the hospital systems’ “purpose has never been more critical and more important than it is today,” saying the coronavirus pandemic “has crystallized why we exist and what we do on so many dimensions, but it also tells us what we can do even better.”

“Together, we are uniquely positioned to deliver value in exceptional care and coverage that is accessible, equitable and affordable while maintaining our unwavering commitment to our local communities in Michigan. And this allows us to build upon our complementary clinical strengths, expand access to more Michiganders and make important investments to improve the health and well-being of people across our state,” Freese Decker said. “…This isn’t about Spectrum Health and Beaumont Health. This is about the people we serve and about transforming health in Michigan. We are coming together for Michigan, by Michigan to improve the health of all of our communities.”

If all goes as planned, the temporarily named BHSH System will have headquarters in both Grand Rapids and Southfield, where Beaumont is based. For now, the Spectrum and Beaumont names on hospitals won’t change — though they probably will in the future as a permanent name is decided upon and an overall brand is established.

The new system will be run by Freese Decker and a board of 15, including seven members from each Spectrum and Beaumont and one additional member. Beaumont Health Board Chair Julie Fream will chair the new system’s board. Beaumont’s current president and CEO, John Fox, will assist in the transition and then exit the organization, saying that he’s ready to retire to spend more time with his family.

Fox said the pandemic forced Beaumont and Spectrum to work closely together over the course of the last year, sharing information and resources. He said the relationship built between the organizations and their clinicians will help ease the transition.

Together, Spectrum and Beaumont run 22 hospitals and 305 outpatient clinics and have some 64,000 employees, including 7,500 doctors and 15,000 nurses. Priority Health, Spectrum’s insurance provider, will also be involved in the merger. Freese Decker said because Beaumont and Spectrum’s current regions don’t overlap, she doesn’t currently expect any facilities to close or anyone to be laid off.

Crain’s Detroit Business reports the merger would make the new company the largest employer in the state.

The hospital systems say the merger would “build a stronger future and provide more accessible, affordable and equitable health care coverage for people across the state.” Freese Decker promised investment in workers, technology, facilities, research, education. She said the goal was to create a culture of inclusion and innovation.

Fox noted the new system will likely be able to save a significant amount of money in technology and information data investments. Freese Decker said combined community outreach initiatives can help improve people’s health, cutting back how frequently people need high-cost care and thereby reducing the total cost of care. She said that will lead to lower costs for patients.

“I think we all know that health care has really got a lot of room for improvement and we believe our coming together as one health system will enable us to take the significant steps necessary to drive needed change,” Fox said. “To improve the health and well-being of the people in the communities we serve, we need to make health care easier to access and, very importantly, more affordable. In bringing together Beaumont Health and Spectrum Health, we truly have an incredible unique opportunity to create a new health care system through the strengths of the state’s two most respected health care systems today. Coming together represents the best of both worlds, keeping care close to home and focused on the needs of our local communities while building a strong infrastructure to make investments where needed for the future. This opportunity is very good for Michigan, our patients, our communities, our physicians and our employees.”

The foundations that handle the health systems’ philanthropic outreach and efforts are expected to remain regional, though Freese Decker said there will certainly be cooperation.

Updates on the pending merger can be found at ForMichiganByMichigan.org.

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