Vanguard Health Systems plans to buy eight-hospital Detroit Medical Center, Michigan's largest healthcare system, for $417 million and spend $850 million more in improvements over 15 years, according to a joint release from both parties in the deal.
Nashville, Tenn.-based Vanguard is a for-profit healthcare system that typically takes bankrupt or near-bankrupt hospitals and turns them into for-profit facilities, the Detroit Free Press reports. It operates 15 hospitals in Illinois, Arizona, Texas and Massachusetts and had $3.2 billion in reserves as of 2009.
The letter of intent between the two parties, which must be approved by city, county and state authorities, stipulates:
• All of the medical center's hospitals would stay open and maintain their charity obligations for at least 10 years.
• Vanguard would retire all of the medical center's outstanding bonds and other long-term debts, including pension contributions.
• Vanguard would spend $75.1 million for a new heart institute.
• Vanguard would apply to create an economic zone around the medical center campus to gain federal funding.
• A regional advisory board made up of four members from Vanguard and three from the medical center will oversee the operation.
• Medical Center Chair Steve D'Arcy and the DMC board will remain.
• The agreement would be voided on June 1 if the two parties cannot agree on the provisions.
Read the release on the merger of Vanguard Health Systems and Detroit Medical Center (pdf).
Nashville, Tenn.-based Vanguard is a for-profit healthcare system that typically takes bankrupt or near-bankrupt hospitals and turns them into for-profit facilities, the Detroit Free Press reports. It operates 15 hospitals in Illinois, Arizona, Texas and Massachusetts and had $3.2 billion in reserves as of 2009.
The letter of intent between the two parties, which must be approved by city, county and state authorities, stipulates:
• All of the medical center's hospitals would stay open and maintain their charity obligations for at least 10 years.
• Vanguard would retire all of the medical center's outstanding bonds and other long-term debts, including pension contributions.
• Vanguard would spend $75.1 million for a new heart institute.
• Vanguard would apply to create an economic zone around the medical center campus to gain federal funding.
• A regional advisory board made up of four members from Vanguard and three from the medical center will oversee the operation.
• Medical Center Chair Steve D'Arcy and the DMC board will remain.
• The agreement would be voided on June 1 if the two parties cannot agree on the provisions.
Read the release on the merger of Vanguard Health Systems and Detroit Medical Center (pdf).