DETROIT -

Beaumont Health System, Botsford Health Care and Oakwood Healthcare have signed a letter of intent and begun exclusive negotiations about merging their operations into a new health care system.

According to a statement released Friday, the boards of the three not-for-profit organizations have approved a letter of intent calling for formation of a new, $3.8 billion health system that would combine assets, liabilities and operations under unified executive and board leadership.

The new system would integrate their combined eight hospitals and 153 other patient care sites into a comprehensive and collaborative health care network focused on advancing quality of care and access to care for people throughout the region. The organizations’ medical staffs will remain separate.

Last year Beaumont announced plans to merge with Henry Ford Health System, but that deal fell through.

The new organization will be governed by a single board and executive leadership structure with representation from the three organizations. John Lewis, Oakwood chairman of the board, will serve as the initial board chair. Gene Michalski, Beaumont CEO, will serve as the initial CEO for the new combined organization. Michalski, Oakwood CEO Brian Connolly and Botsford CEO Paul LaCasse will all serve on the CEO Council, overseeing the transition and implementation of the new system. Michalski will chair the CEO Council. Connolly and LaCasse will remain as president and CEO of their respective organizations during the period of transition. Connolly will also serve as transition executive on behalf of the CEO Council.

“We are three successful health care organizations driven by a shared desire to collectively build upon our success in improving quality, efficiency and value in health care delivery,” says Gene Michalski, CEO of Beaumont Health System. “By combining our strengths, resources, experience and capabilities, we’ll be well positioned to meet future health care challenges while expanding access to high-quality, high-value care for patients throughout the region.”

The new health system will not be final until due diligence is completed, the boards of the three organizations approve a definitive agreement and after appropriate regulatory approvals. 

"This is really all about improving patient care for men, women and children in our respective communities,” says Brian Connolly, president and CEO of Oakwood Healthcare. "If we join forces, we can and we will use quality data and standardized best-practice treatment protocols across the continuum of care for improved health and greater value for the families we serve."

“Physician collaboration and integration is a key priority for all three of our organizations,” says Paul LaCasse, D.O., MPH, president and CEO, Botsford Health Care. ”We will use our combined resources to work collaboratively with our physicians. Employed and private-practice allopathic and osteopathic physicians will be partners in the creation of our new organization.”

Goals of the new organization include:

  • Improving the value of health care services through processes that deliver high quality, well-coordinated patient care at the right time in the right setting at an affordable cost
  • Improving the health, well-being and outcomes of patient populations
  • Improving care efficiency and patient safety by integrating patients’ medical records for easy access by caregivers across all settings of care
  • Improving operational efficiency by lowering and spreading costs over a larger system and through group purchasing of supplies and equipment