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'It would be a behemoth': Employer group raises concerns about proposed Spectrum-Beaumont merger

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A Michigan employer group is expressing concern about the proposed merger between Spectrum Health and Beaumont Health, which would create a new 22-hospital system, according to MiBiz.

Grand Rapids, Mich.-based Spectrum and Southfield, Mich.-based Beamont announced a letter of intent to form a new system June 17. The combined system would have 305 outpatient locations, more than 64,000 team members and $13 billion in operating revenue.

However, the statewide business-labor coalition Economic Alliance for Michigan is worried that the deal would give the new system considerable market dominance that could lead to higher prices for patients and employers.

"We are really concerned about a massive consolidation like this. And it would be massive. It would be a behemoth," Economic Alliance for Michigan President Bret Jackson told MiBiz. "We are really just concerned about the impact on pricing."

In its opposition, the Economic Alliance cited past studies finding that mergers don't result in lower costs or improved quality for patients. 

In particular, Mr. Jackson cited a 2020 RAND Corp. study that found Medicare Michigan paid Spectrum Health hospitals in West Michigan more for care than Beaumont hospitals in Southeast Michigan from 2016 to 2018, raising concern about the new hospital system’s effect on prices. 

Spectrum Health told MiBiz that "attorneys notified the Corporate Oversight Division of the Attorney General's Office in advance of the announcement and have been in communication with that Division to ensure that it has all the information it needs to be confident that this integration will not result in any harm to the charitable assets held by either organization. Because this is not a merger, divestiture, asset sale or a transaction in which a for-profit organization is involved, we are hopeful that the attorney general will have no concerns."

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