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July 07, 2021

Proposed Beaumont-Spectrum merger is like a marriage, experts say. This one might work.

Proposed Beaumont-Spectrum merger is like a marriage, experts say. This one might work.

Beaumont Hospital on 13 Mile Road in Royal Oak. With the merger of eight hospitals, the new combined health care system is expected to employ 33, 093 people and operate 3,337 hospital beds. Photo Credit: Detroit Free Press File Photo

Kristen Jordan Shamus | Detroit Free Press | Published June 18, 2021

The big business of a hospital merger is not unlike a marriage, said Erik Gordon, a professor at the Ross School of Business at the University of Michigan.

It can be harmonious and without acrimony for the patients and staff of the health systems that come together. But it also can end badly, with a reduction in services, job losses, hospitals or offices closing, and higher prices because of less competition.

In the case of the proposed union between Southfield-based Beaumont Health and Grand Rapids-based Spectrum Health, it’s about as good a match as anyone could have wished for, Gordon said.

“Folks should be relieved — patients and employees,” he said, noting that Spectrum comes to the negotiations with a reputation for being well run and without major financial troubles. And because there is no market overlap between the health systems, there shouldn’t be much concern about hospitals closing, major job losses or antitrust issues to snarl the deal.

 

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