Dive Brief:
-
Detroit-based nonprofit Henry Ford Health System is in partnership talks with Wayne State University, which would link their medical school with the leading integrated healthcare system and could reshape healthcare in Detroit.
-
Crain’s Detroit Business reported an affiliation plan would add 330 Wayne State specialists and generalists to Henry Ford’s six hospitals and 1,200-physician medical group. Both sides confirmed the talks to Healthcare Dive.
-
The move could expand Henry Ford Health System’s footprint in its battle with other large area healthcare systems.
Dive Insight:
The news came after a Freedom of Information Act request to get access to documents, reports and emails from Wayne State about the talks.
In response to a FOIA request from Crain’s, John Popovich, president and CEO of Henry Ford Hospital, said the university and Henry Ford's "shared vision has been the basis of the successful collaboration between our institutions and created a mutual desire to advance and deepen that relationship."
"As part of that plan going forward, we are in discussions to explore ways of improving the academic partnership between our institutions. This endeavor is, in no way, intended to negate or damage the relationships both Henry Ford and WSU have maintained with Tenet and (Detroit Medical Center). We value and respect DMC’s critical presence and role in southeast Michigan, as well as other local teaching hospitals with affiliations with WSU, and we will continue to do so," he said.
Henry Ford Health told Healthcare Dive on Tuesday that it does not plan to release any other statements about the talks unless or until the sides come to an agreement.
Wayne State University also provided a written statement to Healthcare Dive that acknowledged that the university has talked to Henry Ford about an affiliation “for a number of years.”
Wayne State said it has a “strong partnership” with Henry Ford and is hoping to deepen the relationship, but added that any “formal announcement of an agreement is premature, and there is no guarantee of an eventual agreement.”
WSU also said the university hopes to continue its long-time partnership with Tenet-owned DMC. WSU called DMC “a critical component in delivering healthcare in Detroit.”
The talks are ongoing, but Henry Ford is likely looking to improve its financial footing, which took a hit in 2017. The system recently reported a net income drop in 2017. Net income fell from $275.6 million in 2016 to $203.7 million last year. Health system officials said wage rate increases and Epic implementation costs at Allegiance Health Group and Affiliates were partly to blame for the drop.
Any merger, acquisition and affiliation talk involving large players in a healthcare market raises alarms about what a potential move could mean for prices. This is the case in a California lawsuit involving Sutter Health. California Attorney General Xavier Becerra is suing Sutter Health for alleged “illegal anti-competitive conduct,” which he contends is leading to higher healthcare costs.
The suit came after a recent report from the University of California-Berkeley found that healthcare costs were 30% higher in northern California, where Sutter has consolidated market power, than they were in Southern California.