Henry Ford Health and Ascension Michigan plan to form a combined $10.5 billion health system with 13 hospitals in the Detroit area, the nonprofit health systems said Wednesday.
Detroit-based Henry Ford and the Michigan division of St. Louis-based Ascension described the agreement as a joint venture, although the eight Ascension Michigan acute-care hospitals and an addiction treatment center involved in the no-cash deal would be rebranded as Henry Ford facilities and run by Henry Ford president and CEO Robert Riney.
The combined system, which would be headquartered in Detroit, would have about 50,000 employees and more than 550 sites of care. It would be governed by a board representative of both systems.
Ascension has been selling hospitals in the Midwest and beyond as it works to improve its finances and shift resources to outpatient care.
The health systems are still determining “the future state of the Catholic identity” of the Ascension Michigan facilities, according to a news release. Ascension Michigan’s hospitals in the southwest and northern part of the state are not part of the proposed deal.
Riney was not made available for interviews.
The organizations hope to close the transaction by next summer and are in the process of submitting the agreement to state and federal regulatory agencies for review, according to the systems.
The proposed combination is one of more than a dozen Midwest hospital transactions that have been proposed or completed in the past year. Ascension, in particular, has been an active seller in the Wisconsin market.
In 2021, Ascension sold seven hospitals, 21 physician clinics and a medical transport company in northern and central Wisconsin to Wausau, Wisconsin-based Aspirus Health. Also that year, the Catholic health system broke up its 19-hospital joint venture with Altamonte Springs, Florida-based AdventHealth named Amita Health.
Earlier this month, Ascension Wisconsin said it plans to sell its 50% stake in Network Health to Milwaukee-based Froedtert Health as Froedtert looks to take full ownership of the insurer.
Outside of the Midwest, Ascension in April said it would sell Providence Hospital in Mobile, Alabama, which is part of Ascension subsidiary Gulf Coast Health System, to the University of South Alabama Health Care Authority. In addition, Ascension in June said it plans to sell Our Lady of Lourdes Memorial Hospital in Binghamton, New York, to Sayre, Pennsylvania-based Guthrie Clinic.
Ascension is tightening its hospital footprint as it generates significant operating losses. Ascension recorded an operating loss of $3.04 billion on $28.35 billion of operating revenue in 2023, according to its audited financial statement for the period ended June 30. In 2022, Ascension generated an operating loss of $879.2 million on $27.98 billion of operating revenue in 2022.
The Ascension Michigan joint deal would allow Henry Ford to expand its growing presence in the Detroit area.
In February, Henry Ford, Michigan State University and Detroit Pistons owner Tom Gores announced plans to invest $2.5 billion in hospital expansions, a medical research center, housing developments, retail and public spaces. The undertaking includes a new $1.8 billion hospital at Henry Ford’s main campus in Detroit.
