Beaumont, Spectrum make progress in merger talks

Karen Bouffard
The Detroit News

Beaumont Heath and West Michigan's Spectrum Health system have signed a formal integration agreement, bringing them a step closer to completing a proposed merger of what would become Michigan's largest hospital system, the health systems announced Thursday.  

The two health systems signed a letter of intent in June to explore creating a new health system that would include Spectrum's Michigan-based health insurance plan, Priority Health, which enrolls 1.2 million customers. 

Aerial view of Beaumont Hospital in Royal Oak

The merger would result in a new system temporarily called BHSH System with 22 hospitals, 305 outpatient locations and 64,000 employees, according to the health systems.

The phrase "For Michigan, By Michigan" was trademarked as the slogan for the new system, which would operate dual headquarters in Grand Rapids and Southfield, the systems said. Executive leadership teams would spend time on both sides of the state, according to the announcement.

“We have worked together to develop a deeper understanding of each organization," said Tina Freese Decker, president & CEO of Spectrum Health, who would serve as the president & CEO of the new system. 

"I greatly appreciate the efforts of our teams, and I remain confident that together we will create an optimal health system For Michigan, By Michigan™,” Decker added in a statement.

Southfield-based Beaumont is Michigan's largest health system with 3,375 beds across eight Metro Detroit hospitals and a net revenue of $4.6 billion. It's Oakland County's largest employer with about 33,000 employees. 

Beaumont has long sought to expand its footprint in Michigan and has engaged in merger talks with two other health systems in the past two years that were not finalized. 

Beaumont in May 2020 ended partnership talks with Akron, Ohio-based Summa Health. Beaumont later entered talks with an Illinois- and Wisconsin-based system, Advocate Aurora Heath, but those talks ended in October 2020 after the potential deal was widely contested by a broad coalition of physicians, nurses, hospital staff, community members and lawmakers.

A tie-up with Advocate Aurora Health, based in Milwaukee and Downers Grove, Illinois, would have made the nonprofit Beaumont Health part of a 28-hospital health system across Wisconsin, Illinois and Michigan. Critics argued the merger would result in a loss of local control over the health system. 

The proposed Beaumont-Spectrum merger would extend Beaumont's influence across the breadth of the southern Lower Peninsula, from Metro Detroit  to Grand Rapids on the western side of the state.  . 

Spectrum Health dominates the West Michigan market with 14 hospitals and 31,000 workers. The Grand Rapids-based system has 2,573 hospital beds and a net revenue of $8.3 billion.

"Both Spectrum Health and Beaumont Health have rich histories with compassionate, high-quality and dedicated health care professionals," Decker said in Thursday's release. "As COVID-19 and the delta variant increase, I am grateful for the care provided to our communities by our team members.

"I look forward to working with our teams to make health care and coverage more accessible, affordable, equitable and exceptional for Michiganders.”

Beaumont Health Board Chair Julie Fream would serve as board chair of the new organization. 

“Beaumont Health and Spectrum Health each have strong legacies of service," Fream said in Thursday's press release. "We are eager to combine the best of both organizations as we create a new health system that is For Michigan, By Michigan™.”

For updates and more information, visit www.formichiganbymichigan.org.

kbouffard@detroitnews.com

Twitter: @kbouffardDN