Beaumont-Spectrum merger becomes official Tuesday, making it Michigan's largest employer

Beaumont Health and Grand Rapids' Spectrum Health will launch as one integrated health system on Feb. 1.

The temporarily named BHSH Health passed regulatory merger approval and is now the largest employer in the state with roughly 64,000 employees, ahead of General Motors Co.'s roughly 48,000 Michigan employees and Ford Motor Co.'s 47,000 local employees.

The companies previously announced the intent to merge in June 2021 but were delayed by regulatory approval.

Tina Freese Decker, the current president and CEO of Spectrum Health, will serve as president and CEO of BHSH and serve on the integrated company's board.

The nonprofit now operates a $12 billion, 22-hospital health system with its own health insurer in Priority Health. The new system will manage investments as one entity, but its philanthropic funds will continue to operate in each specific market.

Beaumont and Spectrum will retain their individual names in the markets they serve, Freese Decker told Crain's. A naming committee between the two systems is being formed to eventually change the parent company title.

While the new entity will begin integration of internal systems, patient care will not change in the process, Freese Decker said.

"While we have joined together as a single health system, nothing changes about the way our patients receive care — your care teams will remain the same, and we will continue to work with the same health insurance companies," she said. "You should continue to access care in the same way you currently do. The same applies to our Priority Health members. Your health insurance coverage remains the same."

The new system is also parting ways with John Fox, the long embattled current president and CEO of Beaumont Health, who will depart the organization on Feb. 4.

Fox led Beaumont down several failed merger deals amid cost-cutting scrutiny at the system before finalizing the deal with Spectrum.

The organization will replace Fox and is conducting an internal and national search for the role, BHSH said in a press release.

Freese Decker said the new entity has no immediate plans to cut staff as part of its integration.

"Right now, we're trying to recruit as many people as possible," Freese Decker said. "We've been very focused on how we can be an employer of choice and convince people to choose healthcare as a career."

Freese Decker said management is drafting up plans to grow Beaumont's presence in the competitive Southeast Michigan market.

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She said the plans include improved digital health services, at-home services, health equity and costs but did not elaborate on what those programs may look like in their developmental phase.

The new system's board is largely made up of internal physicians and longtime Michigan-based executives. The board includes: Chair Julie Fream, president and CEO of the Original Equipment Suppliers Association; Freese Decker; Christopher Carpenter, medical department chief at Beaumont and chair of the Oakland University William Beaumont School of Medicine; Mark Davidoff, president and CEO of The Fischer Group; Doug DeVos, chair of Amway; Marija Grahovac, obstetrics and gynecology physician at Beaumont and former department chief at Oakwood Healthcare; Ronald Hall, CEO of Detroit-based auto supplier Bridgewater Interiors; Angel Hernandez, chief of neurosciences at Helen DeVos Children's Hospital; Philomena Mantella, president of Grand Valley State University; Timothy O'Brien, president of TOB Consulting; William Payne, president of BP Ventures; Robert Roth, president and CEO, RoMan Manufacturing; Thomas Saeli, CEO of JRB Enterprises/Duro-Last; Michael Todman, former Whirlpool chair and president of TMA Ltd.; and Sean Welsh, current board chair at Spectrum and regional president of PNC Bank.

BHSH has filled many leadership roles in the organization, including moving over several leaders at Beaumont and Spectrum to fill similar roles at the parent company. However, several roles are left to fill, including chief risk officer, chief human resources officer and chief strategy officer.

The organization will conduct a search to fill the open positions in the next few weeks.

"As we launch our new health system, we have a bold goal to transform health and are thrilled to unite our two great organizations," Freese Decker said in a press release. "Together, we will leverage our complementary strengths to innovate and make a positive impact for our communities and their health. We look forward to working with our physicians, team members, patients, health plan members and partners across our state to provide healthcare and coverage that is accessible, affordable, equitable and exceptional."

This story first appeared in our sister publication, Crain's Detroit Business.