The Barbara Ann Karmanos Cancer Institute announced Wednesday it will become a subsidiary of Flint-based McLaren Health Care for an undisclosed sum — a move that has the center’s two Detroit partners concerned about the future landscape of the region’s cancer services.
Karmanos will stay in Detroit, officials stressed, but joining forces with McLaren will attract the attention of pharmaceutical and medical device companies launching clinical trials based on patient volume. That means the 12,000 newly diagnosed cancer patients each year at both entities are expected to have access to the most cutting-edge treatments, officials said.
“Patients throughout the state of Michigan aren’t going to have to leave home for the best cancer care in the world,” said Phil Incarnati, president and CEO of McLaren Health Care. “You want your loved one to have access to the best treatments possible to cure their cancer. You don’t want to leave any stone unturned.”
Officials from the two nonprofit medical providers said the merger will produce the largest cancer research and provider network in Michigan and be among the topin the nation.
But opposition to the agreement has been expressed privately and publicly from officials at the Detroit Medical Center, which provides services to the cancer center; and Wayne State University, which has nearly 300 doctors on Karmanos’ staff.
WSU’s relationship with Karmanos has led to a prestigious comprehensive cancer center designation from the National Cancer Institute. Besides Karmanos, the University of Michigan Health System offers the state’s only other comprehensive cancer center, out of 41 nationally.
WSU spokesman Matt Lockwood declined to comment on the merger Wednesday.
But a senior Wayne State official, speaking on condition of anonymity, said numerous university leaders have strong reservations about the agreement, about which they were never consulted.
The merger announcement has WSU leaders questioning the future of the university’s ties with Karmanos.
Karmanos’ comprehensive cancer center designation could possibly be lost if WSU terminates their relationship, the official said. WSU also has been exploring the possibility of expanding its relationship with Henry Ford Health System — and the Karmanos merger could expedite that partnership, the official said.
Meanwhile, DMC Chief Executive Officer Joe Mullany said he was disappointed in how the decision was made, and warned of a possible detrimental impact on cancer care in Detroit. Karmanos board members opposed to the merger said McLaren will be making all of the decisions as the owner of Karmanos.
“My concern is that services will be diminished as McLaren tries to expand its cancer brand in other geographies,” said Mullany. “The decision made going forward is whether the priorities will benefit the patients of Detroit.”
Dr. Gerold Bepler, Karmanos president and CEO, said he was dumbfounded by the concerns. He said the move — which evolved as Karmanos began looking 18 months ago for a partner with a larger regional distribution and no service overlap — is aimed at delivering high-end clinical care in a market that is becoming more complex with molecular cancer treatments.
“We want to be in the forefront of cancer care,” said Bepler. “I cannot possibly see how this would be detrimental to cancer therapy in Detroit. We are here, we are remaining here, we are not moving anywhere. There is no reason this (merger) would damage cancer services in Detroit. It will only make them better.”
Bepler acknowledged that Karmanos’projected $40 million in losses under health care reform over the next 10 years played a small role in the merger.
“It plays into it but it is not the main driver,” Bepler said. “The main driver is really to try and stay focused with our cancer research, set the standard of care for the future, and we needed a larger distribution network.”
McLaren, which owns 10 medical centers in Michigan, plans to infuse an undisclosed amount of capital over the next four year into Karmanos to expand its research and upgrade its facilities in the cancer center’s main campus in Midtown and satellite location in Farmington Hills.
Allan Baumgarten, an independent health care analyst based in Minnesota, said the move appears to be a way for McLaren to raise its profile, especially as hospitals around the state such as U-M and Spectrum Health System in Grand Rapids compete for more market share.
Karmanos’ motivation in the merger may stem from more hospitals working to fill beds and bring in high-end revenues, Baumgarten added.
“It’s better to join up with a major system in the state to at least be assured that the core of the business comes to them,” he said.