Henry Ford Health's $2.2B redevelopment to transform Detroit campus

Mayo Clinic. Johns Hopkins Hospital. Cleveland Clinic. Cedars-Sinai Medical Center. All flagship destination research hospitals that attract complex patients from around the U.S.

This is the class Henry Ford Health aspires to join.

The newly announced $2.2 billion investment into its Detroit campus is a massive step in that direction.

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The investment includes the construction of a $1.8 billion, 1 million-square-foot-plus, state-of-the-art patient tower, including a two-story emergency department, and a previously announced roughly 300,000-square-foot research facility in partnership with Michigan State University. And a key could be nearby residential and commercial development.

It's by far the largest investment in the system's 108-year history.

And it comes at a critical time for health systems in America that are fighting to stay profitable in a shifting healthcare landscape. Rapid consolidation is occurring throughout — Beaumont Health merged with Spectrum Health and the University of Michigan is acquiring Sparrow Health in Lansing — and systems are being forced to find market share anywhere they can.

For University of Michigan Health, which is investing $800 million over eight years into Sparrow, market share continues to grow as increasingly complex patient cases end up in their system. The problem was space, hence the addition of Sparrow's six hospitals. The Ann Arbor-based health system is also constructing a $920 million patient tower next to its existing hospital with all-private rooms and state-of-the-art equipment for complex patients, with 240 beds able to transform into an intensive-care unit, if need be.

Henry Ford Health is following suit and has been the recipient of more complex patients, but its own aging infrastructure and aging neighborhood make it less palatable to some patients, particularly those traveling to and unfamiliar with Detroit.

"We've always been a destination for complex care, but we're growing in that capacity," Bob Riney, president and CEO of HFH, told Crain's. "But when people research (for a hospital to receive care), they want an environment that's not only great for them, but great for their families, who in many cases are going to be staying for multiple days while they're here."

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The groups are also seeking a hotelier to open a hotel on the properties to further support families staying at the hospital.

The project will connect the new hospital, along with the legacy hospital, to the new MSU research center via skywalks and bridges and green space, creating a campus-like feel for the area that is largely defined by aging industrial buildings, office space and parking lots.

Coupled with the residential and retail portion spearheaded by billionaire investor Tom Gores, the area is expected to make a complete transformation. Gores' team will redevelop HFH's headquarters at One Ford Place into residential, something Riney said was important for the system.

Riney and Detroit Pistons Vice Chairman Arn Tellem said the development is spun from the success of the health system and the Pistons partnering on the Performance Center, which includes a Plum Market and Planet Fitness, they built in 2019. Vacating One Ford Place would harm the Performance Center across the street and the MSU research facility going on its parking lot.

"We definitely didn't want to leave that building (One Ford Place) abandoned," Riney said. "All of a sudden Jupiter aligns with Mars. You've got our needs for the mission, you've got an incredible partnership that we have formed with the Pistons, who share the same values about Detroit and being part of the economic vitality (of the city). And then you bring in the education and research component from Michigan State to the table. All of a sudden you see, boy, 3 times 3 is going to equal 10 or 12."

The legacy hospital's emergency department was also not equipped to handle current demand — Riney said it treats about twice the number of patients it was designed to care for. It's among the busiest of the 10 Level 1 trauma centers operating in the state. The emergency department at the Detroit hospital saw 78,924 patient visits in 2022 and has topped 100,000 in years prior.

The new hospital will host a two-story emergency department capable of serving the needs of Detroiters.

"It was never designed in a way for the future of ED, or the current state of ED services, so the team has done an amazing job handling the capacity at the present time," said Dr. Adnan Munkarah, chief clinical officer for HFH. "But we know both our teams and the community deserve better."

HFH has been amassing property for 10 years across the street from its hospital in hopes of someday constructing a new tower.

The plan was largely developed under former CEO Wright Lassiter, who left for the top position at Chicago's CommonSpirit Health last year, but Riney, a lifelong Michigander who has been employed at HFH since 1978, said he intends to stay until the project is completed in 2029.

"I am more energized to lead this organization than I ever thought possible, and it's because of these major transformational projects," Riney said. "I really look at this as an ultimate legacy that any leader would just love to have."

It's not only his legacy that he's concerned with. The addition of a major destination healthcare hub has the potential to propel Detroit to new heights as well.

"Every major Rust Belt city that's had to go through some significant turnaround, whether that's Pittsburgh or whether that's Philadelphia or go down the list, having a world-class medical facility has been the absolute key to the economic multiplier," Riney said. "A world-class medical facility is key to a world-class city. I'm really excited for the city."

This story first appeared in Crain's Detroit Business.