The blockbuster merger between Spectrum Health and Beaumont Health that created the largest in-state health system in Michigan began with a basic “what if” question.
Executives at Spectrum Health and Beaumont had talked frequently over the years about the potential for the two large health systems to get together, but the timing was never right.
As health care providers began operating in crisis mode during the pandemic that hit in early 2020 and as executives talked daily about how to respond and aid one another, the connections between leaders at Spectrum and Beaumont began to evolve.
Their discussions advanced in late 2020 and early 2021 and moved to the board level. They culminated with a mid-2021 agreement to merge Grand Rapids-based Spectrum Health and Southfield-based Beaumont Health into a single health system with an ambitious goal to improve health and the quality of health care across the state.
“Our two organizations have always had some sort of conversation throughout the years and it just wasn’t the right time. As we had conversations (during the pandemic) we said, ‘OK, it is time to do this,’” Corewell Health President and CEO Tina Freese Decker told MiBiz. “It is the opportunity to connect for our health. The opportunity to connect for improving quality care and engaging with our team members, especially after going through a pandemic, was favorable. We also felt that we knew each other because we talked to each other every day during the pandemic, and we collaborated on how we’re going to take better care of patients and our communities.
“It was probably a great learning opportunity for everybody to just get to know each other throughout the organization even before integration discussions occurred, and then it just propelled forward: ‘This is what we can do.’”
Leadership from the two health systems publicly announced their planned merger in June 2021. The deal closed Feb. 1, 2022, creating a health system with 22 hospitals, more than 300 outpatient locations and post-acute care facilities, more than 60,000 employees and 11,500 physicians and advanced practice providers.
The health system today operates as Corewell Health, a name change that took effect in October after using BHSH System as the temporary moniker. The new name reflects how “at our core, it’s about keeping you well,” Freese Decker said.
For the merger, Corewell Health won the 2023 MiBiz Transformational Deal of the Year Award, as determined by an independent panel of judges.
The merger came after Beaumont Health twice in 2020 had to scrap merger plans, first with Akron, Ohio-based Summa Health and then with Advocate-Aurora Health, a 28-hospital system in Illinois and Wisconsin.
Subsequent talks between Spectrum and Beaumont executives “evolved as we’ve always known each other and had these conversations. It evolved from where they were at and where we were at, and we felt we could really make an impact on the health of our communities,” Freese Decker said. Talks became serious “after we started to get our hands around what’s going on with the pandemic,” she said.
“We needed to make sure we focused on our community and what we were doing for the pandemic, and I wasn’t going to let anything distract us from taking care of our community in that way. Once we started to get a sense of what’s going on, then you start to say: Where do we go in the future and how do we really drive that focus on equity, affordability, simplicity and excellence?” Freese Decker said. “It was strategic and started out with a ‘what if.’ It wasn’t because we wanted to be bigger. It was because we believed that by coming together with the skills and expertise, with the experience and the passion, that we could really make health better for the people that we serve every single day.
“When you go through a pandemic, you realize there’s so many things you need to do to improve health, and so the question (became) ‘why not?’ and ‘why not now?’”
Since the merger closed a little more than a year ago, Corewell Health’s business operations have integrated. Work continues in the second year to bring together and align clinical and research operations.
Freese Decker said she was pleasantly surprised to see how well clinical and research teams from both sides of the state moved to connect and collaborate and coordinate their work.
Teams in genetic medicine research from West Michigan and Southeast Michigan came together in a summit to discuss what each is doing and to begin sharing best practices, as have staff from robotics surgery, nursing and pharmacy.
“We did pivot and we pushed that further ahead than what we originally planned,” Freese Decker said. “They’re coming together to say, ‘This is how we can improve the quality of care, this is how we can improve when you look at simple, affordable and equitable.’ They’re really embracing that and driving that forward in a way that I didn’t expect in the first year.”
The integration work proceeded as Corewell Health navigated through the lingering effects of the pandemic and resulting financial pressures — particularly higher labor costs resulting from a worker shortage, especially for nurses — all of which cut deep into operating margins.
As the merger induced a “significant amount of change,” leadership were cognizant of the effects the pandemic had wrought on the industry, the health system and its staff.
“We have to match that with the concern we have with people being tired coming off of a pandemic, the burnout that we have, and all of the other elements of going through our economic challenges of the past year,” Freese Decker said. “We’ve had to balance all of those. How do we have a workforce that is healthy and well and that has the capacity to do what they need to do every day?”
In particular, the integration focused on culture and the distinct differences between conservative West Michigan and Southeast Michigan and metropolitan Detroit.
Corewell Health has sought to bridge those differences with a focus on mission and the ultimate goals that the merger seeks to achieve.
“Culture is how the organization works. It’s all of the ins and outs of an organization to get things done, but what’s really beneficial is that we all share one thing in common, and that’s taking care of people, whether it’s in our health plan, whether it’s in our care facilities,” Freese Decker said. “When we talk about that driving force, that passion about why we’re in health care, it really gets everybody on the same page, and then we talk about how we can deliver that, whether it’s patient care or health plan membership, in the best way possible.
“You start to see people align around that common goal and that’s been beneficial for our culture.”