Beaumont, Botsford and Oakwood finalize $3.8 billion merger to combine operations

(WXYZ) - The combination of three metro Detroit health systems into a new not-for-profit organization took a step closer to reality today.

Beaumont Health System, Botsford Heath Care and Oakwood Healthcare signed a definitive agreement for plans that have been in the works since last March.

The new organization will be named Beaumont Health and will feature eight hospitals, 153 patient care sites.  The system will have 5,000 physicians among its more than 33,000 employees.

“It’s really about driving that value proposition of cost and quality and that’s what we intend to do,” said Paul LeCasse, CEO of Botsford Health Care during a teleconference Monday afternoon.

LeCasse will be serve on a CEO council along with Oakwood CEO Brian Connolly and Beaumont President and CEO Gene Michalski. Michalski will serve as initial CEO of the new health system, according to a press release.

“There’s great coverage from Grosse Pointe all the way down to Trenton and that’s a pretty large swath of southeast Michigan,” said Michalski, referring to the geographic reach of the new health system.

The Federal Trade Commission must approve the new structure and other regulatory hurdles remain.  Approval is expected by the fall.

$134 million in savings has already been identified for the new organization from so-called back room functions such as accounting and IT 

LeCasse said patients will also see benefits from the combined operations.

“They’ll have a common medical record,” said LeCasse. "We will have all of our clinical services providing a coordinated response to the care of those patients and we’re really getting to that point where we can, with our physician partners, really manage the health of a population in southeastern Michigan.”

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