Beau­mont Health com­pletes three-sys­tem merger

Modern Healthcare - - REGIONAL NEWS - —Jaimy Lee

A merger be­tween three health sys­tems in the greater Detroit re­gion— Beau­mont Health Sys­tem, Bots­ford Health Care and Oak­wood Health­care— has closed, cre­at­ing a $3.8 bil­lion not­for-profit health sys­tem now called Beau­mont Health.

The new sys­tem al­ready has iden­ti­fied $100 mil­lion in cost-sav­ings op­por­tu­ni­ties fo­cused on us­ing the com­bined or­ga­ni­za­tions’ pur­chas­ing power to ne­go­ti­ate bet­ter prices and stream­line what ex­ec­u­tives are call­ing back­room op­er­a­tions. No lay­offs are planned. Bots­ford Health Care is a 306-bed hos­pi­tal in Farm­ing­ton Hills, Mich. Oak­wood owns four hos­pi­tals and is based in Dear­born, Mich.

The move from fee-for-ser­vice to value-based health­care is one of the main driv­ers be­hind the merger, of­fi­cials said. That shift is driv­ing hos­pi­tals to re­duce costs. Larger health sys­tems, such as the new Beau­mont, can of­ten de­mand lower prices on med­i­cal de­vices, sup­plies and pur­chased ser­vices than in­di­vid­ual or smaller hos­pi­tal sys­tems.

Beau­mont, a three-hos­pi­tal sys­tem based in Royal Oak, Mich., pre­vi­ously at­tempted to merge with Detroit-based Henry Ford Health Sys­tem. The pro­posed deal failed after six months of ne­go­ti­a­tions.

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