Finance
e-Newsletter
Intelligence Unit Special Reports Special Events Subscribe Sponsored Departments Follow Us

Twitter Facebook LinkedIn RSS

$6.4B Henry Ford, Beaumont Merger Failed on Cultural Hurdles

John Commins, for HealthLeaders Media, May 23, 2013

"We haven't seen the first quarter numbers yet, but for the end of the year the Beaumont finances improved significantly so there wasn't the same kind of financial pressure on them as there was when they first started the discussions I am not sure their path is going to be toward a merger," Udow-Phillips says.

"Henry Ford has already in their history done some mergers with other organizations. I am not sure which ones now they would approach. Henry Ford because their patient base is much more heavily based with public programs, they would benefit financially by finding a partner that would balance that out a little bit but I don't know how realistic that is going to be at this stage."

Baumgarten says Beaumont has already rejected advances from Vanguard "and I don't think that is likely to change."

"There are other possibilities," he says. "The University of Michigan Health System at Ann Arbor is about 50 miles from Beaumont and that is a very prestigious academic medical center which has been trying to extend its reach into different parts of the state through some acquisitions but mostly through different kinds of partnerships."

Baumgarten says some sort of alliance between Beaumont and Oakwood Healthcare System might also garner consideration. "Oakwood serves the west side of the Metro area where Beaumont is on the northeast side. There are geographically compatible," he said.

"Or maybe we'll see a partner relationship where Mayo Clinic or Cleveland Clinic is sharing certain lines of expertise of medical management or other administrative expertise with if not Beaumont than one of the other systems in the area."

1 | 2 | 3 | 4 | 5

Comments are moderated. Please be patient.

1 comments on "$6.4B Henry Ford, Beaumont Merger Failed on Cultural Hurdles"


Mary K Parker (5/28/2013 at 4:19 PM)
If cultures of hospitals vary widely, it's no surprise the leaders would call this off. McKinsey & Company wrote in "Perspectives on Merger Integration" that "when integrating companies are in the same or similar businesses, their top executives tend to assume they are 'just like us' and dismiss the need for deep cultural analysis." According to McKinsey, most mergers are doomed from the beginning[INVALID]-roughly 70% of all mergers fail. In a way, it's probably good that this merger didn't go through at this point due to the widely disparate cultures.