DMC-WSU split may violate sale terms

Karen Bouffard
The Detroit News

A split between the Detroit Medical Center and Wayne State University could violate terms of the health system’s 2011 purchase by a for-profit hospital chain, according to a statement released Friday by the board overseeing compliance with that deal.

The health system and the university announced on May 2 that they would end their 100-year partnership on May 15. They reversed that decision on Monday with a six-month extension to determine if the two institutions can continue offering medical services together.

The Legacy DMC board, created in 2011 by then-Michigan Attorney General Michael Cox to ensure that the health system’s new owners fulfilled promises included in the deal, raised concerns in a public letter released late Friday.

Detroit Receiving hospital.

“Legacy DMC was concerned because it appeared that two of the compliance commitments, those requiring DMC’s continued support for its historic mission to provide medical education and research, could be in jeopardy,” said Legacy DMC Board Chairman Richard Widgren and President Joseph Walsh in the statement.

“Our board is pleased that the two organizations have announced that a joint advisory committee of WSU department chairs and DMC executives has been named to work on the issues over the next three months,” they added.

The statement said that, whatever happens, the DMC must maintain its longstanding role as Detroit’s safety-net hospital.

“Based on its previous monitoring efforts, Legacy DMC believes that the commitment to indigent care has been met,” the statement said. “However, we are analyzing additional information to provide the public with a complete and accurate picture.”

Asked how a split with Wayne State could affect the DMC’s commitments, health system spokeswoman Tonita Cheatham said in an email, “With our mutual goal of wanting to do what is best for our patients, at this time, both DMC and WSU feel it premature to answer your questions.

“Point being that the newly created advisory board was just formed and has not yet met. We want to be respectful of the work the committee will do. As the committee makes progress, we will be in a better position to respond.”

Cheatham emailed an additional comment on Monday, saying, "Our commitment to being an academic medical and research center will not change. Additionally, DMC has a well-established history of serving as the area's safety-net system. As the DMC Legacy report concluded, we have continued to stand up for all who are in need of healthcare and are committed to continuing to do the same now and into the future. And, as you know, our hospitals turn no patient away due to lack of insurance coverage because serving all in need is part of our mission."

Legacy DMC was established to monitor commitments made to the community as part of the DMC’s purchase by the for-profit Vanguard Health Systems hospital chain. Those commitments fell to Dallas-based Tenet Healthcare, another for-profit hospital chain, when Tenet acquired Vanguard in 2013.

Under terms of the purchase agreement, the for-profit owners vowed to continue to provide education and research, and to serve as safety-net health system in Detroit. They have also fulfilled their promise to invest hundred of millions in capital improvements for the DMC’s aging hospitals.

According to Windren’s statement, Legacy DMC has been in contact with top leaders of both institutions, and has offered to facilitate their efforts to reach an agreement.

“Regardless of the outcome of the negotiations, however, Legacy DMC will request Tenet Healthcare to provide detailed information on its arrangements to ensure continuous compliance with the medical education and research commitments of the original sale agreement,” the letter stated.

“Legacy DMC will continue to monitor the situation and will include the results of its review of indigent care and the status of the agreements affecting medical research and education in this year’s report to the Department of the Attorney General and the public, which will be completed in mid-June.”