Dive Brief:
- Detroit-based Henry Ford Health signed an agreement on Wednesday to combine with St. Louis-based Ascension’s southeast Michigan and Genesys healthcare facilities.
- The deal, which the health systems hope to close by next summer pending regulatory review, would create a combined organization with more than $10.5 billion in operating revenue, employing about 50,000 people at more than 550 sites of care across the region.
- The joint venture isn’t a merger or acquisition and no cash transaction will take place, according to a Henry Ford spokesperson.
Dive Insight:
The combined organization will be branded under the Henry Ford name and keep its headquarters in Detroit, according to a press release. Robert Riney, president and CEO of Henry Ford, will lead the new system, and the combined organization’s board of governors will represent both partners.
The joint venture includes all of Henry Ford’s acute care hospitals in addition to Health Alliance Plan. Ascension’s southeast Michigan and Genesys healthcare assets and subsidiaries, including eight acute care hospitals and one addiction treatment facility, will also be included in the deal.
Ascension’s hospitals in the southwest or northern regions of the state aren’t part of the deal, according to the organizations.
Ascension has looked to capitalize on ambulatory services in an effort to improve margins, the nonprofit system said in a recent financial filing. It reported an operating loss of $3 billion in its fiscal 2023 ending June 30, and said it plans to complete divestitures of Our Lady of Lourdes Memorial Hospital in Binghamton, New York, and Gulf Coast Health System in Mobile, Alabama.
In April, the University of South Alabama purchased Ascension Providence Hospital for $85 million, and Ascension Wisconsin also recently announced it would sell its stake in insurer Network Health to Milwaukee-based Froedtert Health.
Henry Ford reported $42.6 million in consolidated operating income for the first six months of the year, which includes both care delivery and insurance operations, compared with a $74.8 million operating loss for the same period in 2022.
