Midland-based MyMichigan Health announced this week that it plans to acquire three Ascension Michigan hospitals in Saginaw, Tawas and Standish, along with a nursing home and a stand-alone emergency department/surgery center.
The deal, which is being called a “definitive agreement,” will expand the health system’s footprint to include a total of 11 medical centers with 12,500 employees in the Saginaw Bay area and the mid- and northwest Lower Peninsula.
“We are not in a position to disclose the terms until the transaction is fully closed, which we expect to be sometime in mid-to-late June,” said Dr. Lydia Watson, president and CEO of MyMichigan Health.
The following Ascension Michigan properties will be included in MyMichigan Health as part of the agreement:
- Ascension St. Hospital Mary’s in Saginaw, a 268-bed Level II trauma center with 24-hour emergency care and a comprehensive stroke center.
- Ascension St. Mary’s Towne Center in Saginaw, which offers 24-hour emergency care along with an ambulatory surgery center, a wound care center and a short-stay facility.
- Ascension St. Hospital Joseph in Tawas, a 47-bed emergency hospital that offers 24-hour emergency care and includes a cardiac center, imaging center, joint replacement center, birthing services and a surgical center.
- Ascension Standish Hospital, a 25-bed critical access hospital in Standish. It also includes all associated offices and physician practices of Ascension Medical Group and the Ascension Standish Skilled Nursing Facility and a 29-bed skilled nursing facility.
- All Ascension Michigan physician practices in the region, which includes a total of approximately 160 providers.
“Our goal is to try to keep care local, and by joining these Ascension groups, it helps us expand in this region and helps us continue to provide quality care,” Watson told the Free Press on Wednesday .
No job losses are expected
Adding Ascension’s patients to the MyMichigan Health system “helps us be stronger and support the infrastructure we already have,” she said, especially when it comes to specialty care. “With the additional patient volume, we will be able to specifically support our cardiovascular program and our neuroscience program.”
Current Ascension employees are unlikely to lose their jobs as part of the deal, Watson said, and MyMichigan has no current plans to close any of the facilities.
“Overall, we don’t expect any job losses,” Watson said. “We are committed to strengthening the recruitment and retention of all staff and providers and this will help us improve community access to local care.
“There’s actually an opportunity for us to even add positions to local communities to support positions that were previously provided by Ascension corporate,” Watson said of the St. Louis-based nonprofit Catholic health system.
“There were a lot of services that were run through a corporation out of St. Louis. These were workers in St. Louis, not necessarily in Saginaw or Standish or Tawas.”
Ascension’s deals face regulatory scrutiny
This is the second deal Ascension has struck with another Michigan health system to consolidate its hospital services in the past year.
In October, Henry Ford Health announced it had signed an agreement to join Ascension Michigan and Genesys to create a $10.5 billion Detroit-based health system with 13 acute care hospitals, approximately 50,000 employees and more than 550 locations for regional healthcare. Robert Riney, president and CEO of Henry Ford, will lead the new combined organization, which will remain headquartered in Detroit and carry the Henry Ford Health name and brand.
However, Ascension Michigan’s deals with both Henry Ford and MyMichigan Health must go through regulatory review before they can be completed.
The U.S. Department of Justice, the Federal Trade Commission, and state attorneys general have regulatory oversight to protect consumers, who may suffer from higher prices, job cuts, hospital closings, and poorer quality of care when competition the market is limited by consolidation.
In December, the Federal Trade Commission and the US Department of Justice adopted tougher antitrust rules for mergers and acquisitions, including those in health care. The rules prohibit mergers and other transactions that increase concentration in highly concentrated markets or eliminate competition; agencies have blocked other recent mergers between health systems in other states.
Danny Wimmer, a press secretary for Michigan Attorney General Dana Nessel, told the Free Press on Wednesday: “The department is reviewing the Henry Ford/Ascension matter and similarly expects to review the Ascension/MyMichigan matter under its charitable trust and antitrust authority.
“Unfortunately, unless and until a lawsuit is filed, the attorney general is generally prohibited by law from disclosing matters related to his antitrust investigations.”
This is just the latest in a series of hospital consolidation announcements in Michigan in recent years. A Free Press analysis of hospital ownership found that mergers, acquisitions and other consolidation deals have affected more than 50 hospitals since 2021, affecting more than 150,000 healthcare workers and millions of patients.
More ▼: As Michigan’s major health systems merge, independent hospitals disappear
These types of agreements typically save health systems money. The larger their market share, the more leverage a company has to negotiate reimbursement rates with private insurers, negotiate better prices for supplies and services, and manage low Medicaid and Medicare reimbursements. said Alan Baumgarten, a Minneapolis-based health care analyst who has published an annual review of the Michigan health care market since 1997.
“The MyMichigan deal mirrors what Ascension did in Wisconsin two years ago when it transferred seven small hospitals to Aspirus Health of Wausau, Wisconsin,” Baumgarten said.
“Ascension is less interested in being a rural provider and focuses on specific urban markets where it is in the top two or three largest provider systems. And even then, as in Milwaukee, it focuses all new facility investment on growing suburban areas and with micro-hospitals rather than full-size inpatient facilities.”
If Ascension Michigan’s two deals with Henry Ford Health and MyMichigan Health close later this year, Ascension will be left with just four Michigan properties — all in the southwestern part of the state:
- Ascension Allegan Hospital in Allegan
- Ascension Borgess Hospital in Kalamazoo
- Ascension Borgess-Lee Hospital in Dowagiac
- Ascension Borgess-Pipp Hospital in Plainwell
Ascension is among the nation’s largest health care providers, reporting 139 hospitals and 40 nursing facilities in 18 states at the end of December. Despite struggling financially in 2022 and early 2023, posting a net loss of $2.66 billion, the health system has managed to turn its finances around in recent months. It reported revenue of $359 million for the six months ending in December.
Among other major hospital deals in recent years in Michigan:
- In 2022, Beaumont Health and Spectrum Health merged to create the state’s largest health system, Corewell Health, which now has 21 hospitals with 5,000 licensed beds and 65,000 employees across most of the Lower Peninsula. This deal includes Priority Health, an insurance plan with more than 1.3 million members. It now has 21 percent of the state’s health care market share, Baumgarten told the Free Press for a previous article.
- In 2023, University of Michigan Health finalized its agreement with Lansing-based Sparrow Health, forming a $7.8 billion hospital network with 46,000 employees and 11 hospitals stretching from Ann Arbor north to Carson City and west to Grand Rapids. The deal included the Sparrow’s Physicians health plan, which at the time had 70,000 members and 300 employers in Michigan, as well as a Medicare Advantage plan. It now has 15.4% of the healthcare market share nationwide.
Although MyMichigan Health is considered a separate business entity from University of Michigan Health, the two organizations share a clinical affiliation and business partnership; MyMichigan Health also uses the UM brand and logo.
“They have negligible ownership in us,” Watson said, adding that UM’s famous Block M logo and branding can only be used by MyMichigan Health if it meets the standards and criteria for safety, accreditation and quality of care required by Michigan Medicine.
All Ascension properties to be acquired under this new deal will also eventually be renamed and rebranded, Watson said, with the MyMichigan Health name and the UM block M brand.
If MyMichigan Health is included in UM Health’s market share, it increases the percentage of its total coverage nationwide to about 17.9 percent — and that’s before Ascension’s new properties are added, Baumgarten said.
Ascension Michigan did not respond to questions from the Free Press.
Henry Ford Health said only that the merger agreement with Ascension Michigan remains “under regulatory review” and that it hopes to close later this year.
Contact Kristen Shamus: [email protected]. Subscribe to the free press.