DEARBORN, Michigan — Oakwood Healthcare, Beaumont Health System, and Botsford Health Care 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. 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.
Oakwood Hospital on Oakwood Boulevard in Dearborn, Michigan (photo via WikiMedia Commons)
Oakwood has four acute care hospitals, including its main hospital and medical center campus in Dearborn. It is one of the largest employers in Dearborn.
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. The new health system will not be final until due diligence is completed, the boards of the three organizations approve a definitive agreement and after appropriate regulatory approvals.
“We are three successful health care organizations driven by a shared desire to collectively build upon our success in improving quality, efficiency and value in health care delivery,” says Gene Michalski, CEO of Beaumont Health System. “By combining our strengths, resources, experience and capabilities, we’ll be well positioned to meet future health care challenges while expanding access to high-quality, high-value care for patients throughout the region.”
“This is really all about improving patient care for men, women and children in our respective communities,” says Brian Connolly, president and CEO of Oakwood Healthcare. “If we join forces, we can and we will use quality data and standardized best-practice treatment protocols across the continuum of care for improved health and greater value for the families we serve.”
“Physician collaboration and integration is a key priority for all three of our organizations,” says Paul LaCasse, D.O., MPH, president and CEO, Botsford Health Care. “We will use our combined resources to work collaboratively with our physicians. Employed and private-practice allopathic and osteopathic physicians will be partners in the creation of our new organization.”
“I am very pleased because I knew that talks were under way to prepare Oakwood Hospital to be successful in the evolving health care market place,” said Dearborn Mayor John B. O’Reilly. “I was very hopeful that the talks would center on locally managed operations, rather than a healthcare company coming in from the outside. I cannot think of a better outcome than what has been proposed,” said O’Reilly. “Once completed, everyone living in the greater Detroit region should benefit from this remarkable plan.”
“Healthcare is moving toward a wellness model based on early intervention and proactive treatment that achieves permanent solutions in the most cost-effective manner,” said O’Reilly. “These new partners have already demonstrated their commitment to being the health care providers of the future and, with this proposal of combining their resources, they represent an invaluable asset for our entire region.”
Goals of the new organization include:
- improving the value of health care services through processes that deliver high quality, well-coordinated patient care at the right time in the right setting at an affordable cost
- improving the health, well-being and outcomes of patient populations
- improving care efficiency and patient safety by integrating patients’ medical records for easy access by caregivers across all settings of care
- improving operational efficiency by lowering and spreading costs over a larger system and through group purchasing of supplies and equipment
The new organization will be governed by a single board and executive leadership structure with representation from the three organizations. John Lewis, Oakwood chairman of the board, will serve as the initial board chair. Gene Michalski, Beaumont CEO, will serve as the initial CEO for the new combined organization. Michalski, Oakwood CEO Brian Connolly and Botsford CEO Paul LaCasse will all serve on the CEO Council, overseeing the transition and implementation of the new system. Michalski will chair the CEO Council. Connolly and LaCasse will remain as president and CEO of their respective organizations during the period of transition. Connolly will also serve as transition executive on behalf of the CEO Council.
A system-wide Clinical Leadership Council, including physicians, nurses and other health providers, led by physicians, will develop and drive physician alignment and integration. This group will advise the CEO Council for all medical matters. The organizations’ medical staffs will remain separate.
All three organizations will also maintain their existing medical school relationships.
A letter of intent is an agreement that signals the desire of the organizations to enter into a new partnership. It begins the process of negotiating a definitive agreement and conducting “due diligence,” during which representatives from the systems work closely together to explore how best to bring the organizations together.
Beaumont Health System
Beaumont Health System is a three-hospital regional health system with 1,778 licensed beds, more than 14,000 full-time equivalent employees and nearly 3,100 physicians, including 500 employed physicians in the Beaumont Medical Group and more than 2,600 private-practice physicians. In addition to its hospitals in Royal Oak, Troy and Grosse Pointe, Beaumont has numerous community-based medical centers in Oakland, Macomb and Wayne counties, family practice and internal medicine practices, five nursing centers, a research institute, home care services and hospice. Beaumont is the exclusive clinical teaching site for the new Oakland University William Beaumont School of Medicine.
Botsford Health Care
Botsford Health Care is an integrated health care system including Botsford Hospital, Botsford Commons Senior Community and Community Emergency Medical Service. Botsford Hospital is a 330-bed hospital and verified trauma center located in Farmington Hills. Each year Botsford cares for more than 16,000 inpatients and 60,000 emergency trauma patients with 2,500 employees, 300 volunteers and more than 600 physicians. The hospital is home to an extensive medical education program affiliated with Michigan State University’s College of Osteopathic Medicine. Botsford Commons Senior Community, located in Farmington Hills, provides a variety of residential choices for the elderly: independent living in condominiums and apartments, a senior assisted living center and a rehabilitation and continuing care center. Community Emergency Medical Service provides ambulance transportation, emergency and non-emergency treatment along with educational services to healthcare organizations, municipalities and communities throughout Southeastern Michigan.
Oakwood Healthcare
Oakwood Healthcare is an independent, not-for-profit health care organization committed to improving the health and well-being of the individuals and communities in Wayne County. As one of the largest employers in the county, Oakwood provides acute, specialty, primary and preventative care services backed by excellence in research and education. With four acute care hospitals and more than 50 outpatient facilities, Oakwood’s 9,000 employees and 1,300 physicians represent nearly every medical and surgical specialty and subspecialty. Oakwood was also a finalist for the 2011 Malcolm Baldrige National Quality Award.
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