Allegiance Health announced this morning their intent to become a member of Henry Ford Health System (HFHS). Henry Ford is a five-hospital system headquartered in Detroit. According to a news release, Allegiance Health (AH) and Henry Ford Health System have signed a letter of intent to affiliate, with Allegiance Health becoming a member of HFHS. Full details and terms of the proposed affiliation will be announced, in consultation with key stakeholders and in compliance with regulatory requirements.
HFHS is one of the nation’s leading comprehensive, integrated health systems. Founded in 1915 by auto pioneer Henry Ford, the health system is committed to improving the health and well-being of the diverse communities it serves. According to the release, this new relationship would position both institutions to better serve patients and their communities in a rapidly changing health care environment.
“Together, HFHS and Allegiance Health will build on our non-profit legacies of quality care to provide greater value to patients, and sustainable health improvement for all, including underserved populations,” said Allegiance Health President and CEO Georgia Fojtasek, RN, EdD. “In HFHS, Allegiance Health has found a partner who shares our commitment and vision. By joining one of the state’s premier health systems, Allegiance Health is building on our long-standing commitment to even higher quality and cost-effective health care for our community.”
Henry Ford Health System CEO Nancy Schlichting believes the proposed relationship between AH and HFHS will help patients receive care in the location best for them, which is often close to home. “We know how important Allegiance Health is to the Jackson community, and how dedicated its staff and physicians are to the health of their neighbors,” she said. “Ultimately, our proposed affiliation would provide enhanced and efficient care locally whenever possible.”
The proposed affiliation will give Allegiance Health greater access to new state-of-the-art technologies and data driven care models, and enable physicians and other clinicians from both systems to work together to develop innovative approaches to patient care. It will also help Allegiance Health expand its services strategically, and have better access to capital funding. By working together with HFHS, Allegiance Health can become more efficient, generating additional funds from Allegiance’s operations that will stay in the Jackson community. These funds, and others that will be made available to Allegiance Health through the affiliation, will enable HFHS to guarantee a $300 million investment in Allegiance Health over the next five years. $100 million would be allocated toward capital investments in a new facility and improvements, $150 million toward routine support of existing facilities and $50 million toward the implementation of the Epic project, which would provide Allegiance Health with a new electronic health record platform designed to give doctors, nurses and clinical staff easy access to the most up-to-date patient information.
“While we would anticipate many positive changes as a result of the proposed affiliation between Allegiance Health and HFHS, some things – like our vision for health care in this community – remain the same,” said Ray King, MD, Allegiance Health Senior Vice President, Medical Affairs and Chief Medical Officer. “After considering multiple alternatives, we found that the proposed affiliation with Henry Ford Health System is the best path forward for Allegiance Health and for our community.”
Under the proposed new structure, Allegiance Health leaders and local community leaders will continue to represent local interests on the board of trustees and governance committees, and influence the future of Allegiance Health, together with leaders from HFHS.
Throughout the United States, health systems are seeking affiliations and alignment with other health systems and physician groups in order to prepare for new insurance payment models that require high quality of care for large populations of people. With the proposed affiliation, Allegiance and HFHS will participate more efficiently in new federal and state programs, such as accountable care organizations (ACOs) that incentivize health systems to provide better and more coordinated care for entire populations of patients while minimizing costs.
The announcement follows nearly two years of discussions with various health systems, most notably a one year exclusive agreement between University of Michigan Health System and Allegiance to explore a partnership. That agreement expired earlier this year and since then Allegiance has explored mergers with several systems.