KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Mich. Hospital Systems Announce Large-Scale Merger Plan

The two large hospital systems' merger plan would create a 10-hospital system that company officials say would be better suited to face health law implementation challenges.

Detroit Free Press: Combined Beaumont, Henry Ford Hospital System Could Enjoy Greater Efficiency
Several long-term trends help explain why the merger of Henry Ford Health System and Beaumont makes sense. One is the coming implementation of the nation's new health care law, known informally as Obamacare. The law, and particularly the individual mandate to obtain health coverage in 2014, will swell the number of people seeking health care. Many of these new patients may be carrying insurance coverage for the first time, which is good for hospitals that up to now have been struggling to get paid for treating uninsured people (Gallagher, 11/1).

Detroit Free Press: Henry Ford, Beaumont CEOs Assure: No Big Layoffs Or Closures In $6.4 Billion Merger
Additionally, hospitals worry about the possibility of reduced federal reimbursements for patient care and in medical education. Henry Ford and Beaumont have affiliation agreements with medical schools at Wayne State University and Oakland University (Erb and Walsh, 10/31).

The Wall Street Journal: Michigan Hospital Systems In Merger Talks
[The proposed merger] would create an organization with $6.4 billion in annual revenue, 10 city and suburban hospitals, and 100 other patient-care sites. ... Top officials of the two nonprofit health-care systems said in interviews Wednesday that they don't anticipate closures of their facilities or widespread layoffs, arguing that the joint organization will be able to grow, possibly beyond the state's borders. Greater efficiencies, officials argue, will come from reducing duplicative services and curtailing new capital projects that were drawn up as the two systems sought to grab market share from one another (Dolan and Rogers, 10/31).

Detroit Free Press: Consumer Advocates React To Beaumont, Henry Ford Merger Deal With Caution
Health care consumer advocates reacted cautiously Wednesday to a planned mega-merger of the Henry Ford and Beaumont health systems. "The devil is going to be in the details," said Marjorie Mitchell, executive director of the Michigan Universal Health Care Access Network, which advocates for better health care. "Our concern will be as it always is: Are we able to maintain affordability and quality? That remains to be seen" (Yung and Erb, 11/1).

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