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Bridge Michigan
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Experts: Henry Ford, Ascension Michigan venture likely to impact care, costs

henry ford hospital
‘Patient care will not be disrupted in any way’ in Henry Ford Health’s partnership with a Catholic health system, hospitals insist. (iStock photo by Ayman Haykal)
  • Henry Ford Health appears to be a winner in ‘joint venture’ with Ascension.
  • The agreement is part of a big year for Henry Ford that includes $3 billion in expansion plans at its Detroit campus.
  • Questions remain, including: Will it be allowed?

A proposed partnership that would dramatically reshape health care in southeast Michigan has prompted questions about its long-term impact on patient care and cost.

On Tuesday, Detroit-based Henry Ford Health and Ascension Michigan released a few more details about a “joint venture” that would corner 43 percent of the southeast Michigan market, according to one market analyst’s report, but at least two experts are calling for more transparency and oversight.


“These mergers, these acquisitions, these joint agreements — they're having a tremendous impact on hospital pricing in the state of Michigan,” said Bret Jackson, president of the nonprofit Economic Alliance for Michigan, a nonprofit labor-management group with a focus on health care costs containment.


He was referring to a string of recent health care partnerships that have coincided with rising health care costs, although hospitals have argued that rising costs are driven by other factors such as inflation and labor prices.

A statement from Henry Ford on Tuesday predicted the venture would provide “better, more cost-effective care in the communities we serve” but so far only a few details have been made available: 

  • The eight Ascension properties will operate under the Henry Ford Health flag;
  • Henry Ford’s president and CEO Bob Riney will remain at the head of the structure;
  • Henry Ford will be “majority owner,” assuming “overall management of the former Ascension hospitals.”

Given the potential impact of another hospital consolidation, Bridge turned to four experts to sort out what is known — and what isn’t — about the newest venture.

Bob Riney headshot
Bob Riney, Henry Ford Health president and CEO, will lead the expanded system. (Courtesy photo)

Unknown: Patient care

It’s easily the most important question, experts agree: How will patient care and cost be impacted?

The thinking, of course, is that larger systems provide “economies of scale” — the ability to buy supplies in bulk or to employ an upper hand when negotiating with providers or insurers. 

The American Hospital Association has reported that mergers can cut operating costs by more than 3 percent and has maintained that costs are driven by inflation in supplies and equipment and labor costs. But other studies and experts suggest that newly expanded health systems drive higher costs and lower quality of care.

“There’s a kind of a trade off involved in consolidation,” said Zachary Levinson, who studies health care costs for KFF, a San Francisco-based health care research nonprofit.

“On the one hand, you can imagine consolidation leading to greater efficiency. As the scale of an organization increases, they have more purchasing power,” Levinson said. “But at the same time, their leverage also — relative to health plans and patients — is increasing, so there’s less competitive pressure on them to lower prices or (ensure) quality.” 


Known: The upper hand

While the agreement was described as a “joint venture,” it seems clear that Henry Ford had the upper hand in the agreement with the national chain.

Neither hospital has bragging rights to big profits right now.

Henry Ford had a net loss of $218.5 million in 2021, and Ascension hospitals in the area lost $16.3 million that year, according to a report by market analyst Allan Baumgarten, a Minneapolis-based market analyst who studies trends and organizations in local health markets. 

Nonetheless, Henry Ford, even before its planned partnership with Ascension, had announced a $3 billion transformation of its Detroit campus. 

“Henry Ford is very clearly sending a message to the marketplace that they are in growth mode,” said Matt Friedman, a former trustee of Children’s Hospital of Michigan who also served as a member of the committee that oversaw the Detroit Medical Center’s transition from a nonprofit entity to a for-profit member of Vanguard Health.

“If you look just at their ambitious plans in the city of Detroit alone, you would get that message. And now it appears that there's a suburban growth strategy and that they are eager to let the marketplace know about that,” Friedman said.

The hospital systems have said no cash will exchange hands as part of the deal but both were silent, in response to Bridge questions, about whether other assets will be exchanged. The Tuesday statement asserted that such details can’t be shared before the partnership receives federal and state regulatory approval.

Unknown: What will regulators say?

Several agencies must bless health care courtships.

The Federal Trade Commission and U.S. Department of Justice enforce federal antitrust laws, and in Michigan, the Attorney General may oversee the shift, too. 

The extent of state review varies, depending on the type of entities involved and the type of transaction, according to Danny Wimmer, a spokesperson for Attorney General Dana Nessel. 

A nonprofit’s sale to a for-profit entity triggers a detailed examination since charitable assets are being diverted to a money-making purpose. In 2010, then-Attorney General Mike Cox allowed the shift of the Detroit Medical Center from a nonprofit entity to a for-profit entity only if Vanguard agreed to hundreds of millions of dollars in safeguards. 

In contrast, the state has not openly challenged other big changes, including the Beaumont/Spectrum agreement to become the largest hospital system in the state, with more than 60,000 employees, or Michigan Medicine’s acquisition of Lansing-based Sparrow. 

Those agreements did not involve for-profit entities and no assets changed hands, Wimmer said. 

At the federal level, it’s unclear what national resistance the Henry Ford-Ascension venture might face. In 2021, President Biden vowed to fight “the excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony.” 

The Federal Trade Commission last year thwarted at least four hospital merger attempts.

A venture that would lock down about 43 percent of the market in southeast Michigan is a large enough deal to put it in the “red zone” for regulators, Baumgarten said.

 Allan Baumgarten headshot
Citing rising health care costs, market analyst Allan Baumgarten is one who has called for more oversight of hospital mergers and other agreements. (Courtesy photo)

Federal regulators may not have challenged the merger last year between Beaumont and Spectrum health systems, in part, because the resulting Corewell Health crossed multiple markets and allowed some competition to remain throughout the state. 

The Henry Ford-Ascension mash-up, however, is concentrated, especially in the Detroit area.

And 43 percent is “a market share number that would have antitrust regulators concerned,” Baumgarten, the market analyst, said.

Unknown: Culture

The partnership brings together very different organizations — one a Catholic system and the other a secular health system recognized for its care for LGBTQ patients and a stated commitment, on the day that the U.S. Supreme Court struck down federal protections to abortion access, to a continuum of care for women with the “through the lens of what’s in the best interest medically of our expectant patients and their families.”

The statement Tuesday asserted that “patient care will not be disrupted in any way,” at Henry Ford but added that, at the Ascension facilities, “conversations on the future state of the Catholic identity of these facilities are ongoing.”

Catholic hospitals, including Ascension, must follow the dictates of the U.S. Conference of Catholic Bishops, which explicitly forbids them to provide abortion or enter into agreements with other entities so that staff would “manage, carry out, assist in carrying out, make its facilities available for, make referrals for, or benefit from the revenue generated by immoral procedures.”

And earlier this year, the Conference urged that “Catholic health care services must not perform interventions … (that) transform the sexual characteristics of a human body into those of the opposite sex.”

Unknown: Staffing changes

Henry Ford’s statement offered little insight on the fate of employees of the two systems other than to point out that “nothing will change immediately” and that the joint venture is just “beginning an important regulatory process.” For now, the two hospital systems will continue “to operate as independent and separate organizations.”

Once the agreement is complete, the statement said, the “expanded team would transition to Henry Ford Health’s benefits package and have access to additional choices for care and coverage.”

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