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Metro Health and University of Michigan Health System sign definitive agreement for affiliation

BY Thursday, September 15, 2016 04:39pm

Metro Health would become part of the University of Michigan Health System by year’s end under a definitive agreement announced today.

Directors at Metro Health and regents at U-M have each approved an affiliation agreement that would lead to a major new player in the West Michigan health care market.

“Upon closing, Metro Health and U-M Health System will create a clinical care network that builds upon the strengths of the world-class U-M academic medical center and a very successful community-based health system,” the two health systems stated this afternoon in a joint announcement. “Together the two organizations will focus on bringing increased health care innovation to west Michigan and beyond.”

Closure of the deal is pending regulatory approval.

The affiliation would make Metro Health part of a health system known for high-quality and deep-clinical expertise. U-M Health System would help Metro Health expand its primary and specialty care offerings.

“We are very excited about the opportunities we will have, together, to advance the boundaries of clinical practice and medical science through research discoveries and disseminating knowledge,” Metro Health CEO Mike Faas said.
Specifics of the affiliation agreement, including financial terms, were not publicly announced.

The deal comes a year after Metro Health abruptly ended talks with Tennessee-based Community Health Systems Inc. on a proposed joint venture after two years of due diligence. Metro Health later renewed talks with U-M and the two signed a letter of intent in June.

U-M Health System three years ago was among the health systems that originally submitted a proposal after Metro Health decided to seek a partner.

At the time, U-M Health System proposed a deal to acquire a 75-percent stake and take over 100-percent ownership after five years in exchange for a $25 million payment to the Metro Health Foundation. U-M Health System also proposed in 2013 to provide Metro Health capital that included a commitment of $100 million over five years.

“We too are excited about this relationship that should continually improve the care we can – together – provide residents of the state of Michigan. Metro Health will be essential to helping us move groundbreaking research and discovery from bench to bedside,” said Dr. Marschall Runge, CEO of the U-M Health System.

Today’s announcement noted that “physicians, executives and community members from west Michigan will continue to serve on Metro Health boards and committees, working closely in the future with University of Michigan leaders as they plot a future strategic course together.”

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