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2 Key Health System Joint Ventures to Watch in 2024

Analysis  |  By Jay Asser  
   November 09, 2023

One partnership is just beginning while the other has so far been a drain on earnings.

Two recent and notable joint ventures by health systems will be worth keeping an eye on as the calendar flips.

Henry Ford Health signed an agreement last month with Ascension Michigan that will bring the latter's southeast Michigan and Genesys facilities and assets under Henry Ford's.

Meanwhile, HCA Healthcare's joint venture with physician staffing firm Valesco, which it acquired a majority stake in earlier this year, is having a sizeable impact on its bottom line.

Here's a look at what each joint venture means for the respective health systems, both now and going forward.

Henry Ford Health and Ascension

Essentially, the move creates a combined organization with over $10.5 billion in annual operating value that will keep the Henry Ford Health brand and headquarters in Detroit.

Henry Ford Health president and CEO Bob Riney will lead the new system, which will employ approximately 50,000 people across more than 550 sites of care, while the board of directors will be represent both systems.

The nonprofits said that the agreement is not a merger or an acquisition and that no cash transaction will take place. The deal, which includes all of Henry Ford Health's acute care hospitals and other care facilities and assets, including Health Alliance Plan, is expected to close in summer 2024 pending federal and state regulatory reviews.

The agreement creates a fully integrated healthcare delivery network that will offer "exceptional performance in quality, safety, and service" while "expanding access to care, lowering costs, and improving health outcomes," the organizations said.

For Ascension, the move allows the St. Louis-based hospital operator to benefit from the combined operating revenue and Henry Ford Health branding after facing financial struggles in fiscal years 2022 and 2023. For this past year, Ascension posted a net loss of $2.7 billion and an operating loss of $3 billion as it dealt with high expenses and sustained revenue challenges.

In an effort to bolster margins, Ascension also sold Providence Hospital to the University of South Alabama for $85 million earlier this year and gave up 50% of its stake in insurer Network Health to Milwaukee-based Froedtert Health.

For Henry Ford Health, the joint venture adds locations under its name and extends its reach in the community. Through the first half of this year, the health system reported consolidated operating income of $42.6 million, an improvement from the $74.8 million in operating loss during the first six months of 2022.


The joint venture by HCA, on the other hand, is already creating a headache for the giant health system less than a year into the deal.

The health system giant revealed that its partnership with Valesco cost the company approximately $100 million its adjusted EBITDA for the third quarter and year-to-date basis, while resulting in around $50 million lost per quarter in the near future, CFO Bill Rutherford told investors on a call.

HCA acquired 90% of Valesco earlier this year through an agreement with now bankrupt Envision Healthcare to fortify its physician roles and eventually deliver significant revenue. Instead, the joint venture has so far fallen short of expectations by a wide margin.

HCA leadership said that as they started to see claims paid, the revenue was at a lower rate than they anticipated. To address the results, Rutherford pointed to efforts to reduce the cost structure, adjust programming, and work with payers on reimbursement. He also mentioned that with HCA's increased position, they now manage the entirety of the revenue cycle which puts them in a better position to assess trends and respond to them.

CEO Sam Hazen stood behind the decision to form the joint venture, saying: "It is important to understand that we believe the decision to consolidate Valesco was strategically imperative in maintaining the overall competitive positioning and capacity offerings of the company. As has been the case historically with our teams, I am confident that we will find a pathway forward to mitigate the impact it has had on our results."

Considering financial headwinds and the general state of hospitals across the country, HCA's finances are still holding upโ€”it reported net income of $1.08 billion, compared to $1.13 billion over the same period last year.

However, if the results from Valesco don't turn around over the next year, look for HCA to potentially pursue other dealmaking to balance out their earnings or find a way to cut their losses.

Jay Asser is the contributing editor for strategy at HealthLeaders. 


Henry Ford Health and Ascension moved to combine, expanding care and producing $10.5 billion in annual operating value.

HCA's joint venture with Valesco is expected to cost the health system $50 per quarter going forward, but leadership conveyed some optimism that those results will be mitigated soon.

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