'Coalition' insists sale of Detroit Medical Center to Vanguard is illegal

Three nonprofit groups referring to themselves as the Coalition to Protect Detroit Health Care are calling the recently announced sale of Detroit Medical Center--a nonprofit system consisting of eight hospitals--to for-profit, Nashville-based Vanguard Health Systems illegal, according to Michigan state law. 

In a letter to Michigan Attorney General Mike Cox, the groups contest that the deal violates a section of the state's law that says nonprofit corporations can't "permit assets...to be used, conveyed or distributed for non-charitable purposes," reports the Nashville Business Journal. The coalition--comprised of Michigan Universal Health Care Access Network, Metropolitan Organizing Strategy Enabling Strength (Moses) and Michigan Legal Services--is also worried about the state of poor patients who have received care from the hospital system in the past.

"We want to make sure the sale reflects the long-term best interests of the city of Detroit versus the short-term interests of Vanguard," said Marjorie Mitchell, the executive director of Michigan Universal Health Care Access Network.

Cox ultimately must approve the deal, which also requires Renaissance Zone approval--meaning the hospitals would receive state and local tax breaks because they reside in "blighted communities"--before it can be finalized, according to the Detroit Free Press. Wayne County's Board of Commissioners will discuss the Renaissance Zone plan for the hospital next week.

Vanguard insists it will carry on with DMC's charity-care policies for the next decade. Furthermore, DMC President Mike Duggan is optimistic that a review of the deal will show it to be in compliance with state law. 

"We're 100 percent confident that the DMC/Vanguard deal was done legally," Duggan told the Nashville Business Journal

The deal ultimately would push Vanguard's annual revenues past $5 billion. Currently, Vanguard has acute-care hospitals in Arizona, Illinois, Massachusetts and Texas. 

To learn more:
- read this Nashville Business Journal article
- read the Detroit Free Press article
- here's the letter from the Coalition to Michigan AG Mike Cox, via the Free Press

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.