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'For Michigan, By Michigan': Why Spectrum-Beaumont merger 'just makes sense'

Southfield-based Beaumont Health and Grand Rapids-based Spectrum Health are preparing for a proposed merger, and the Michigan health systems view it as a chance to improve care accessibility and affordability for the communities they serve. 

Spectrum and Beaumont announced a letter of intent to merge June 17. The merger would create a 22-hospital system with 305 outpatient locations, more than 64,000 team members and $13 billion in operating revenue. 

Tina Freese Decker, president and CEO of Spectrum, who will lead the new organization, and Beaumont Health Board Chair Julie Fream told Becker's they're excited about the proposed reorganization. They shared their reasoning behind the proposal, how the new organization would be governed and how they plan to get key stakeholders on board.

Editor's note: Responses were lightly edited for length and clarity.

Question: What prompted the merger talks, particularly at this time? 

Tina Freese Decker: We have long admired and respected Beaumont Health. We've collaborated over many years. Our physicians and our team members know each other, whether it's (from) working on statewide issues or quality or research, and we've also grown closer together through this pandemic in the past year. We realized there was an opportunity for us to come together in a more formal way and that we are uniquely positioned to deliver greater value and exceptional care and coverage that is accessible, equitable and affordable, while maintaining our unwavering commitment to our local communities in Michigan. That's one of those opportunities where we knew each other, and we wanted to align on a common goal.

Julie Fream: From a Beaumont Health perspective, we certainly realize the healthcare landscape is changing and changing rapidly. We want to be sure we're part of that process. The opportunity with Spectrum Health allows us to build on our strengths. We'll be able to accelerate to value-based care, which is critical for us as an organization, and make meaningful investments in our shared future.

Q: What would the combination mean for patients and staff? 

TFD: For our team members, there are no immediate planned changes to employment or compensation at this time as a result of the integration. We also don't have any plans to close any sites. Spectrum and Beaumont operate in two distinct markets, so there's no overlap.

For our patients, today, they can continue to access and receive care in the same way they currently do. But we are enthusiastic about the prospect of bringing together two of Michigan's most respected health systems to create a new system that improves the health of individuals throughout our state. Our focus is on improving healthcare quality, value and outcomes, on improving health and health equity, and included in that is also diversity, equity and inclusion within our organization. We want to enhance the experience. We want to make healthcare more affordable for our communities, and we want to ensure the voices of our physicians and team members are heard throughout that process so we can continually improve in the quality we provide.     

Q: What would the new board's role be? 

JF: The new organization will be governed by a systemwide board. However, the local fiduciary boards will also remain in place in their current committee structures, and they retain local governance oversight over key areas. At the system level, there will be a 16-member board. Seven seats will be chosen by Beaumont Health. Seven seats will be appointed by Spectrum. And, of course, the president and CEO of the new organization will be on the board. Then following the new organization being formed, we will have a new board member who is appointed by that group, for a total of 16. We will also have at least three physicians on the board. 

Q: From your perspective, why would this combination work, given Beaumont canceled merger plans with Akron, Ohio-based Summa Health in May 2020 and canceled merger plans with Advocate Aurora Health, which has dual headquarters in Downers Grove, Ill., and Milwaukee, last October? What makes this unique? 

JF: This new organization is for Michigan and by Michigan. As an organization, Beaumont knows Spectrum and vice versa. Our organizations have a shared commitment to Michigan. We have worked together in the past, particularly recently through COVID. We've shared best practices. In this situation, I will be the chair of the new board of directors. Along with Spectrum, Beaumont will have equal representation on the board. I think what you'll see is it's a completely different set of circumstances. 

The other thing we did as part of the process of coming to these discussions, from a Beaumont board of directors perspective, is we added three new physicians to the board, making it a total of six physicians on our board of directors at Beaumont. This was very impactful. We had their perspective and their input in terms of what we were discussing and how we were approaching forming this new organization. They had a lot to say about this and made a difference in terms of how we put our partnership together.  

TFD: We spent the time up front to talk about what we could do together and what this would mean. And because we have a health plan, it really helps us deliver on our value transformation journey we want to achieve. As an integrated health system, we're working to reduce the total cost of care and ensure that care is affordable. We spent a lot of time with the board together, as well as leadership, talking about what this future could look like and the impact we could have on affordability, accessibility, equitable, exceptional care and coverage for the community.

Q: How will Beaumont and Spectrum get key stakeholders, including staff, on board with this merger?

TFD: I've talked to many people, and I would say there's widespread enthusiasm from West Michigan, Southwest Michigan and Southeast Michigan about this opportunity. Many people throughout the organization — physicians and donors and team members, many others — have seen what this can create. They recognize the health plan and what we can do from a value perspective. I've received a lot of comments about, "This just makes sense," and it's a great opportunity to truly transform healthcare for Michigan, by Michigan.

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