GRAND RAPIDS, MI — The proposed merger of Spectrum Health and Beaumont Health is not expected to result in job cuts or building closures “at this time,” Spectrum President and CEO Tina Freese Decker said in a press conference Thursday.
“We will invest in our people through training, development and career opportunities,” she said in the virtual press conference, which came about 90 minutes after the merger exploration became public. “Since our markets do not overlap and are distinct, I do not anticipate any closures or loss of jobs at this time.”
Later during the press conference, when asked to elaborate on her remarks, Freese Decker did not provide additional information.
“Right now, we are really focused on bringing the two organizations together,” she said. “Both organizations are strong. We have complementary strengths, and I see a lot of opportunity for us to come together and find new opportunities.”
Grand Rapids-based Spectrum Health and Southfield-based Beaumont Health announced Thursday that they’ve signed a letter of intent to explore creating a new health care system that would include more than 64,000 employees and roughly $13 billion in revenue. It would be the largest such organization in the state.
“We are excited about the opportunity to bring together Spectrum Health and Beaumont Health,” Freese Decker said. “We have similar missions and visions as well as future aspirations. We have long track records of providing exceptional clinical care for our communities as well as a strong focus on academics and research.”
While the merger could allow for some consolidation of higher administrative positions between the two companies, University of Michigan business professor Erik Gordon told MLive he doesn’t anticipate the merger resulting in too many lost jobs.
Because the two hospital systems are located in separate parts of the state, there is no need to close hospitals or clinics in the merger, which would result in healthcare staff like nurses and doctors losing their jobs, said Gordon, who studies mergers and acquisitions in the biomedical industry.
He said there could be some consolidation when it comes to jobs that can be done across both systems, like information systems and technology.
“I don’t think there’s going to be any huge cost savings here (on the staffing side),” Gordon said. “You don’t need two CEOs and CEOs are expensive, so there will be some savings there. They eventually will be able to get some savings in information technology… they’ll be able to do it at a larger scale.”
Freese Decker said the merger, which must be approved by regulators, could be completed by the fall. Now that the two health systems have signed the letter of intent, officials are engaged in due diligence and integration planning.
“We believe that this combined organization will really benefit patients, members and the state of Michigan, and we have confidence that the regulators respect the fact that our organizations are nonprofit and mission driven,” she said. “In addition, Beaumont Health and Spectrum Health operate in distinct markets with no market overlap. So as a result, I do not anticipate any regulatory concerns.”
Freese Decker would serve as president and CEO of the new health system, which would be led by a 16-member board of directors and is temporarily being called the BHSH System. A final name would be chosen following the completion of the merger, which could close this fall following regulatory approvals, Freese Decker said.
Stretching from metro Detroit to Grand Rapids, the BHSH System would operate 22 hospitals and 305 outpatient locations and have more than 64,000 employees. That includes more than 7,500 physicians, more than 3,000 advanced practice providers and more than 15,000 nurses. It would also include Priority Health, a Grand Rapids-based health insurance provider owned by Spectrum.
The names of Spectrum’s and Beaumont’s buildings won’t change, Freese Decker said.
“The names you see on the hospitals like Butterworth or Blodgett will remain,” she said. “It’s important that we honor the legacy names of both organizations and we will go through a process to determine what that new system name is.”
— MLive reporter Melissa Frick contributed to this report.
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