Henry Ford merger de­layed

Beau­mont chiefs want sys­tem to re­con­sider deal

Modern Healthcare - - REGIONAL NEWS - Jay Greene Crain’s Detroit Busi­ness, with Mod­ern Health­care staff

Five clin­i­cal ser­vice chiefs at Royal Oak, Mich.-based Beau­mont Health Sys­tem de­liv­ered a let­ter to the Beau­mont board of di­rec­tors ask­ing the board to re­con­sider its pro­posed merger with Henry Ford Health Sys­tem, sources told Crain’s Detroit Busi­ness.

Three board mem­bers voted to block a vote to re­con­sider the merger, sources said. The board then tabled a dis­cus­sion on the is­sue for at least three weeks to con­duct more due dili­gence on the ex­tent of op­po­si­tion from the Beau­mont physi­cians, the sources said.

“The chiefs think this merger is a bad deal and are against it,” said a physi­cian knowl­edge­able about the let­ter and board meet­ing. Crain’s was un­able to de­ter­mine whom the clin­i­cal ser­vice chiefs rep­re­sent.

Co­lette Stimmell, Beau­mont’s di­rec­tor of cor­po­rate com­mu­ni­ca­tions, said board dis­cus­sions are con­fi­den­tial. How­ever, Stimmell said Beau­mont and Henry Ford have ex­tended their let­ter of in­tent. Last Oc­to­ber, Beau­mont and Detroit-based Henry Ford an­nounced a merger that would cre­ate South­east Michi­gan’s largest not-for-profit health sys­tem, with nine hos­pi­tals and $6.4 bil­lion in an­nual rev­enue.

The two or­ga­ni­za­tions orig­i­nally said they wanted to sign a de­fin­i­tive agree­ment in the first half of this year. “A merger of two prom­i­nent or­ga­ni­za­tions is a big de­ci­sion. So, it’s not un­usual for there to be dif­fer­ent view­points about it,” Stimmell said in an e-mail.

Henry Ford spokesman Dwight An­gell con­firmed that the sys­tem’s board ex­tended the let­ter of in­tent. “We main­tain our be­lief that bring­ing to­gether two strong and high- ly suc­cess­ful health sys­tems is the right thing to do for the com­mu­nity and for the fu­ture of health­care in Michi­gan,” An­gell said in an e-mailed state­ment.

Two days af­ter the board meet­ing, Beau­mont Ex­ec­u­tive Vice Pres­i­dent and Chief Med­i­cal Of­fi­cer Dr. Ana­nias Dio­kno an­nounced plans to step down from the po­si­tion in June and re­tire in Septem­ber. Dr. David Wood, pres­i­dent of Beau­mont Physi­cian Part­ners, will re­place Dio­kno as CMO.

When the sys­tems an­nounced their in­tent to merge last Oc­to­ber, they said their med­i­cal staffs would re­main sep­a­rate.

Of the 3,150 doc­tors on Beau­mont’s med­i­cal staff, about 2,500 are in­de­pen­dent pri­vateprac­tice physi­cians.

The Henry Ford sys­tem, on the other hand, op­er­ates the Henry Ford Med­i­cal Group with 1,200 em­ployed physi­cians and the Henry Ford Physi­cian Net­work with 650 pri­vate prac­tice doc­tors. The sys­tem also has about 2,000 in­de­pen­dent physi­cians on staff at its Wyan­dotte, Ma­comb and West Bloom­field hos­pi­tals. —

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