Garden City Hospital, one of the last independent community hospitals in Michigan, is being sold to Prime Healthcare Services, a California-based for-profit hospital chain.
The roughly $80 million acquisition, announced Thursday, will ensure that the hospital can stay afloat in the new health care environment that exists under the federal Affordable Care Act, said Gary Ley, president and CEO of the Garden City hospital.
The agreement will allow “substantially” all of Garden City Hospital’s roughly 1,400 employees to keep their jobs. Prime Healthcare has agreed to maintain Garden City Hospital as an acute care hospital and will continue to provide charity care at the existing levels or better as well as maintain a local governing board, Ley added.
“They’re going to hire substantially all of the employes ... (and) they expect to keep leadership here and carry on,” Ley said Thursday.
The federal Affordable Care Act rewards health systems for becoming more efficient, and many hospitals are merging or searching for new partners to achieve economies of scale.Two of the region’s largest health care systems, Henry Ford and Beaumont, scrapped plans in May for a merger that would have created a 10-hospital system serving as much as 40 percent of the area’s patients.
“We’ve been paying our bills, and we’ve made money the last two years ... but in the future we’ll need much more capital and (need to become) part of a bigger system in terms of meeting some of the dynamics of Obamacare. That’s what’s been driving the conversion,” Ley said.
Prime Healthcare will invest at least $35 million in capital improvements at the 323-bed hospital. The transaction is pending regulatory approvals from the Michigan State Attorney General’s office, a process that could take several months.
Prime Healthcare was nationally recognized in 2013 as one of the “15 Top Health Systems in the Nation” by Truven Health Analytics (formerly Thomson Reuters), based on quality of health care and patient satisfaction. It was the third time in five years the health system was recognized. Eight Prime Healthcare hospitals were ranked among the “100 Top Hospitals in the Nation” in 2013, according to a press release issued jointly Thursday.
Established in 1960, Garden City Hospital is one of Michigan’s few remaining independent community hospitals. It’s located on Inkster Road, just north of Ford Road and just west of Telegraph and is easily accessible from I-96 and I-275.