Henry Ford, Beaumont Announce $6.4 Billion Health System Merger

Beaumont and Henry Ford health systems announced Wednesday that they have signed a letter of intent to merge and become Metro Detroit's largest health provider.

The deal would result in a $6.4 billion new organization, according to a statement. It would have 10 hospitals, 38,000 employees, insurer Health Alliance Plan and and the Oakland University William Beaumont School of Medicine. A handout at the press conference said the two medical staffs would remain independent.

A Henry Ford-Beaumont combination would give the new system 38 percent to 40 percent of the Detroit area market, according to Minneapolis-based hospital analyst Allan Baumgarten, the Detroit News reports. No health system now controls more than 25 percent of the market, he said, adding that such a merger would certainly draw federal antitrust scrutiny.

Beaumont spent the last six months or so reviewing partnership options, according to a source. The system also talked with players including Vanguard Health Systems Inc., which owns the eight-hospital Detroit Medical Center, Hospital Corporation of America and at least one other local system, but settled on Henry Ford for its cultural similarity, nonprofit status and industry excellence, according to the source.

Read more:  Detroit News

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