Allegiance Health lost $13.2 million on revenue of $420.4 million in the year ended June 30, according to a November filing to bondholders. The not-for-profit organization operates a 285-bed hospital about 40 miles west of Ann Arbor. It is the only acute-care hospital serving Jackson County, and Allegiance is the dominant provider in the area. In the bond filing, Allegiance leaders cited increased competition for high-margin services such as cardiovascular care, as well as declining admissions and a rise in bad debt and charity care.
“Together, UMHS and Allegiance Health will build on our nonprofit legacies of quality care to provide even greater value to patients and sustainable health improvement for all, including underserved populations,” said Allegiance CEO Georgia Fojtasek in a written statement.
According to a document on the UMHS website, there are no immediate plans to close any facilities within either health system and no plans to change the name of Allegiance.
A UMHS spokeswoman cited an expected increase in demand from patients with new coverage under the Patient Protection and Affordable Care Act as a reason for the system's interest in the partnership. “In general, this is all about being prepared for and ready for all of the changes coming in healthcare,” UMHS spokeswoman Kara Gavin said.
Although the system has been involved in several other affiliations with health systems in recent years, Gavin said this would be the first one to incorporate an entire system. The deal, if approved, is expected to be completed within six to 18 months, Gavin said.
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