Michigan health systems team for $48M Detroit laundry facility
Three Michigan health-care systems are partnering to reactivate a vacant industrial building in Detroit for a $48 million medical laundry service facility.
Henry Ford Health System, Michigan Medicine at the University of Michigan and St. Joseph Mercy Health System join others for the facility in the Northwest Goldberg neighborhood north of Interstate 94 and west of the Lodge Freeway. The facility will improve efficiencies with greater automation and annually process 78 million pounds of linens, the health-care systems said.
"I think the unique nature of this is that you have competing health systems collaborating for the greater good of providing quality products for our patients in an assured, reliable service for everyone," said James O'Connor, Henry Ford's vice president of supply chain management, who led the effort.
Construction at 1150 Elijah McCoy Drive will begin this spring and will double the current building to 105,000 square feet to become one of the largest shared medical laundry facilities in the country. Metropolitan Detroit Area Hospital Services, a Michigan nonprofit, will own and operate the facility when it opens in spring 2020. The nonprofit is expected to hire 100 people for the facility.
The cooperative facility represents a 15-20 percent reduction in cost due to scale, O'Connor said. The health-care operators will pay proportionate to their loads.
The nonprofit, which Henry Ford and Saint Joseph, a member of Livonia-based Trinity Health have owned for nearly four decades, has operated a shared laundry facility on Oakman Boulevard on Detroit's west side, but the health-care systems have outgrown that building and its aging equipment and infrastructure. The 70 employees there will move to the new building.
It is unclear at this time whether the health systems will sell or repurpose the former building, O'Connor said
Likewise, Ann Arbor-based Michigan Medicine’s laundry facility turns 50 this year. It processes nearly 11 million pounds of laundry every year. Upgrading it or building a new facility was estimated to cost up to $22 million.
Discussions for a new shared laundry facility began in 2016. Henry Ford purchased the 10-acre property in 2017. The facility will occupy 40 percent of the land, and the Detroit-based health system will retain the remaining property for future use. Henry Ford is looking at various options, O'Connor said.
The joint venture has issued bonds to finance the construction. It will operate without government subsidies.
The new facility is being built with the environment in mind. A wastewater heat reclamation system will capture heat from wastewater and use it to preheat fresh water during the washing process to reduce natural gas consumption.
Four hospitals, including St. Joseph Mercy Ann Arbor hospital, founded the Metropolitan Detroit Area Hospital Services in the early 1970s. Henry Ford joined it in the 1980s, and it later grew to include other Saint Joe's hospitals. The University of Michigan's board of regents approved its addition to the nonprofit in February.
Nearby in 2015 on Rosa Parks Boulevard, Ohio-based Cardinal Health opened a new distribution plant. In 2020, the Henry Ford Cancer Institute will open its new cancer facility across West Grand Boulevard from its main hospital building.