Henry Ford Health, Wayne State reach tentative deal to team up

Two of the biggest healthcare organizations in Detroit—Henry Ford Health System and Wayne State University School of Medicine—have signed a long-awaited letter of intent to affiliate, a move that would shake up the healthcare market in Southeast Michigan.

The agreement, which is expected to be finalized within six months, covers medical education, clinical services and research, officials said Friday morning in a statement.

It also comes on the heels earlier this week of a five-year deal reached between Wayne State University Physicians Group, the medical school's faculty practice plan, and Detroit Medical Center on clinical and administrative services.

In May, Crain's reported that Henry Ford and Wayne State have been talking about combining forces for nearly two years under the code name "Project Leapfrog," a reference to the hope the partners could grow their healthcare operations beyond that of other health systems based in Southeast Michigan, including Beaumont Health, Trinity Health and Ascension Health.

"I am pleased to inform you that Wayne State University and Henry Ford Health System have signed a non-binding letter of intent to expand our partnership and bring our two Detroit anchor institutions even closer together," M. Roy Wilson, M.D., president of Wayne State, said in a statement.

"This is a significant step toward our shared vision of building a joint health sciences center that will transform healthcare delivery, medical education and research, and — most importantly — the health outcomes in our city, and beyond," Wilson said.

Under the proposed plan, which Wilson said will take hard work to finalize, the affiliation would designate Henry Ford Hospital in Detroit as the primary institutional affiliate for Wayne State University's School of Medicine, College of Nursing and Eugene Applebaum College of Pharmacy and Health Sciences.

Wilson explained that the health sciences center "will not be a physical location, but a separate operating and governance structure with a president, board, budget and governing committees." It would oversee management and financial coordination of the partnership's clinical, research and educational programs and activities, he said.

Governing boards for Wayne State and Henry Ford have expressed unanimous support of the plan, Wilson said.

"This is a great example of a public university and a private nonprofit organization coming together to serve an important mission for the benefit of our community," Wilson said. "Our goal is to radically improve the health and wellness of those in our community, and beyond—including the most vulnerable populations. We believe we can achieve more toward this goal by working together rather than independently."

Wilson also made it clear that the affiliation under discussion is not a merger or acquisition. He said both Wayne State and Henry Ford will continue to work with other contracted partners, including DMC.

Starting in the early 1990s and running through 2010, efforts were made between Henry Ford and Wayne State to forge an expanded medical education, research and clinical services relationship.

In 2008, Wayne State broached an affiliation with Henry Ford during a contract dispute with DMC that was prompted by former CEO Mike Duggan withholding about $1 million per month in payments from Wayne State. The contract dispute was resolved and affiliation talks were put on hold.

During the affiliation talks in 2010, Henry Ford considered investing in Wayne State's new iBio building, but backed off because of the economic recession.

When talks again began in 2016, the relationship between Wayne State and DMC had reached a new low as a variety of disputes erupted over children's and adult services between the two long-time partners.

Medical school Dean Jack Sobel, M.D., has lamented that the difference in cultures between public entity Wayne and for-profit DMC would limit the parties to remain "transactional" partners.

In a December 2016 town hall meeting, Sobel said of DMC: "It appears our cultures are incompatible and we are looking for other partners." Wayne State had already begun talks with Henry Ford.

"Henry Ford Health, Wayne State reach tentative deal to team up" originally appeared in Crain's Detroit Business.