Henry Ford Health plans to spend roughly $5 billion over the next 10 years on a proposed joint venture with Ascension Michigan along with the overhaul and expansion of its main Detroit campus, said Robin Damschroder, Henry Ford’s chief financial officer.
In October, Henry Ford and the Michigan division of St. Louis-based Ascension announced a proposed joint venture that would create a combined $10.5 billion health system with 13 hospitals. 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 its president and CEO, Robert Riney. The proposed venture is set to close this summer.
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Meanwhile, Henry Ford, Michigan State University and Detroit Pistons owner Tom Gores announced plans last February to invest close to $3 billion in hospital expansions, a medical research center, housing developments, retail and public spaces around Henry Ford’s Detroit campus. The project will be completed in phases over a 10- to 15-year period.
About two-thirds of the roughly $5 billion Henry Ford expects to spend on integrating Ascension Michigan hospitals and funding the Detroit campus project would come from operations, Damschroder said. Approximately 15% would be funded through philanthropy and debt offerings, with the remainder coming from cash and proceeds of an agreement to build an energy hub at Henry Ford's renovated campus, she said.
In addition, regulators in August approved a joint venture between Henry Ford’s insurance arm—Health Alliance Plan—and CareSource, an Ohio-based managed care health plan with members in seven states. The joint venture should help Henry Ford win a bid for a request for proposal from the Michigan Health and Human Services Department for Michigan’s Medicaid managed care contract, Riney said.
“This is one of the most exciting times in Henry Ford’s history,” he said.
