Five clinical service chiefs at Beaumont Health System Tuesday delivered a letter to the Beaumont board of directors asking the board to reconsider its proposed merger with the Henry Ford Health System, sources told Crain's.
Three Beaumont board members voted to block a vote to reconsider the merger, sources said. It was unclear how many of Beaumont's 20 directors were present at the meeting. Crain's was unable to determine whom the clinical service chiefs represent.
The board then tabled a discussion on the issue for at least three weeks to conduct more due diligence on the extent of opposition from the Beaumont physicians, the sources said.
"The chiefs think this merger is a bad deal and are against it," said a physician knowledgeable about the letter and board meeting.
CEO Gene Michalski of Beaumont declined comment. Colette Stimmell, Beaumont's director of corporate communications, said board discussions are confidential.
However, Stimmell said Beaumont and Henry Ford have extended their letter of intent. The two organizations originally said they wanted to sign a definitive agreement in the first half of this year.
"A merger of two prominent organizations is a big decision. So, it's not unusual for there to be different viewpoints about it," Stimmell said in an e-mail to Crain's.
"However, our merger discussions continue."
Dwight Angell, director of media relations at Henry Ford, confirmed that the Henry Ford system board met this week and extended the letter of intent. He did not specify how long an extension.
"We maintain our belief that bringing together two strong and highly successful health systems is the right thing to do for the community and for the future of health care in Michigan," Angell said in an e-mailed statement.
Last October, Beaumont and Henry Ford announced a mega-merger that would create Southeast Michigan's largest nonprofit health system, with 10 hospitals and $6.4 billion in annual revenue.
However, many observers cautioned that rough sledding lie ahead, primarily because of the makeup of the two systems' medical staffs.
Of Beaumont's 3,150 doctors, about 2,500 are independent private practice physicians. The other 650 doctors are employed by the system.
The Henry Ford system, on the other hand, operates the Henry Ford Medical Group with 1,200 employed physicians and the Henry Ford Physician Network with 650 private practice doctors.
"Physicians at Beaumont have been opposed to this merger from the start," said the physician. "They haven't said anything before because it's taken them a while to get organized."
When the Beaumont-Henry Ford merger was announced, executives said it would result in a larger and more efficient organization that could flourish with changing payment systems coming under health care reform.
A fully integrated system with 40 percent market share and hybrid medical staffs also could share best practices to improve quality and patient safety, avoid unnecessary capital expenses and create a leaner workforce and management staff.
"5 Beaumont clinical chiefs ask system to reconsider Henry Ford Health merger" originally appeared in Crain's Detroit Business.
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