Business & Tech

Hospitals Become Region's Largest Health-Care System in $3.8 Billion Merger

Beaumont Health, a new entity created by the consolidation of three regional health-care systems, will be larger than Henry Ford Health System, the St. John Providence Health System or the Detroit Medical Center.

The boards of three big metropolitan Detroit hospitals have unanimously agreed to a $3.8 billion merger to create one organization that will become the largest combined system in the region.

The boards’ votes consolidates Royal Oak-based Beaumont, Dearborn-based Oakwood and Farmington Hills-based Botsford, and creates a non-profit health-care organization comprised of eight hospitals and 153 patient care sites, the Detroit Free Press reports.

The new organization will be called Beaumont Health, the Free Press said. Each of the three hospitals will have representatives on the new organization’s board of directors.

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Combined, the three health systems employ 25,000, but industry experts say some layoffs and reductions in patient beds may occur as a result of the merger, the Free Press said.

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Consultant Allan Baumgarten, publisher of Michigan Health Market Review, told the newspaper the combined entity would control about 30 percent of the health-care market in the Tri-County region.

Goals of the merged system announced in March 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.


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