Henry Ford Health is coming together with several of Ascension Michigan’s hospitals and other facilities to form a joint venture with over $10.5 billion in annual operating revenue, the organizations announced Wednesday.
The deal, which is expected to close in summer 2024 pending federal and state regulatory reviews, includes all of Henry Ford’s acute care hospitals, related facilities and assets, including its Health Alliance Plan.
On the side of Ascension Michigan—a subsidiary of the national Catholic giant—eight acute care hospitals and an addiction treatment facility will be contributing to the new organization. These include Ascension hospitals and subsidiaries located in southeast Michigan and those of Ascension Genesys.
Seven other Ascension Michigan hospitals and related facilities located in the southwest and northern parts of the state “will remain valued members of Ascension’s national health ministry,” according to the announcement.
“Together we can expand healthcare services and deliver innovations in care—from prevention and early detection through the treatment of complex conditions—to more people and communities across our state, including those who are most vulnerable,” Robert Riney, president and CEO Henry Ford Health, who is slated to lead the new organization, said in the joint announcement. “We share a deeply-rooted dedication to providing world-class healthcare that everyone deserves, regardless of geographic, demographic or socioeconomic status.”
Should the deal close, the partners said the resulting system would employ about 50,000 people, including roughly 2,700 employed physicians, and include 13 acute care hospitals plus more than 550 sites of care.
The entity would take on Henry Ford Health’s branding and would keep its Detroit headquarters. Alongside Riney at the helm, the new organization would be governed by a board that’s representative of both organizations, according to the announcement.
Of note, the nonprofits stressed in a media fact sheet that their pending arrangement “is neither a merger nor an acquisition. This would be a joint venture, which means the organizations plan to bring assets together. No cash transaction would take place.”
Whether the Ascension facilities will retain their Catholic affiliation is still under consideration, though the two parties said they “are committed to working to maintain the Catholic identity of the Ascension Michigan facilities.” The Henry Ford locations “would continue to operate as they have,” according to the fact sheet.
“We are united in our shared values, cultures and commitment to those we serve,” Carol Schmidt, senior vice president at Ascension and ministry market executive for Ascension Michigan, said in a statement. “Together, we will make significant strides in improving the health of Michigan communities through unparalleled investments in critical community health initiatives, as well as contributing secure, high-paying jobs and other related employment.”
The organizations said their plan will result in an expanded, fully integrated healthcare delivery network that will offer “exceptional” care service quality and better opportunities to meet consumer needs. They also promised “expanded career pathways and increased opportunities for career development and advancement,” which will help the joint venture grow and attract talent; “significantly enhanced” care delivery models; and improved care coordination via interconnectivity between patients, providers and care management positions.
“The commitment of the new combined organization to clinical excellence, educational partnerships and research remains steadfast, as is the focus on continuing to advance research that has immediate clinical applications and will improve treatment and outcomes,” Adnan Munkarah, M.D., president of care delivery system and chief clinical officer at Henry Ford Health, said in a statement. “Additionally, the expanded footprint created through this joint venture will allow Henry Ford Health to provide outstanding comprehensive medical care, train more physicians, nurses, and allied health professionals, at more sites, and in more specialties, across the communities we serve.”
Though hit by financial headwinds like much of the healthcare provider sector, Henry Ford Health wrapped its 2022 fiscal year with operations narrowly in the black by a $234 million net loss due to investments. As of the midyear mark of 2023, it reported a 1.1% operating margin and a $153.7 million net gain.
Ascension, meanwhile, recently reported a nearly $2.7 billion net loss for its latest fiscal year ended June 30. The Catholic juggernaut said its difficulties were driven by a combination of high expenses, “sustained revenue challenges” and a one-time noncash impairment loss of almost $1.5 billion. Earlier this month, it unveiled a deal to offload its 50% stake in a jointly run Wisconsin health plan to Froedtert Health.