Beaumont-Spectrum merger delayed by FTC backlog, officials say

The proposed merger of Southfield-based Beaumont Health and west Michigan's Spectrum Health has been delayed by a backlog of filings at the Federal Trade Commission, the health systems said in a Friday press release. 

The two health systems signed a letter of intent in June to explore creating a new health system that would include Spectrum's Michigan-based health insurance plan, Priority Health, which enrolls 1.2 million customers. 

"The Federal Trade Commission (FTC) is experiencing a surge in filings across all industries and will take longer than originally anticipated to review the BHSH filing," the health systems said, referring to the four-letter name they have given the proposed merged system. 

In an email to The Detroit News, Beaumont spokesman Mark Geary said “We are eager to launch our new health system as soon as possible, but recognize this will likely be beyond the fall.” 

The federal agency wouldn't comment on the status of the Beaumont-Spectrum merger or the existence of a regulatory backlog. 

"I’m sorry but the agency doesn’t comment on proposed transactions, and it doesn’t confirm the existence of or comment on investigations," FTC spokeswoman Betsy Lordon said in a Friday email to The Detroit News. 

Beaumont is Michigan's largest health system with 3,375 beds across eight Metro Detroit hospitals and a net revenue of $4.6 billion. It's Oakland County's largest employer with about 33,000 employees. Spectrum Health has 14 hospitals in West Michigan. 

The merger would result in a new system temporarily called BHSH System with 22 hospitals, 305 outpatient locations and 64,000 employees, according to the health systems.

In Friday's release, the health systems said they "remain committed" to the merger, and Beaumont and Spectrum are currently responding to a request for additional information from the FTC .

"Several weeks after signing an integration agreement, pre-integration planning is now underway, which is permissible under regulatory guidelines, and will not be implemented until closing," the press release stated.

 "The two organizations are beginning to identify representatives to start collaborating on ways to successfully launch the new health system, which will initially be temporarily named BHSH System."

Beaumont has long sought to expand its footprint in Michigan and has engaged in merger talks with two other health systems in the past two years that were not finalized. 

Beaumont in May 2020 ended partnership talks with Akron, Ohio-based Summa Health. Beaumont later entered talks with an Illinois- and Wisconsin-based system, Advocate Aurora Heath, but those talks ended in October 2020 after the potential deal was widely contested by a broad coalition of physicians, nurses, hospital staff, community members and lawmakers.

"Spectrum Health and Beaumont Health remain committed to a shared vision to provide more accessible, affordable, equitable and exceptional health care and coverage for people across our state," the release stated. "They continue to be confident that creating a combined health system is pro-competitive and will benefit the communities they serve."

kbouffard@detroitnews.com

Twitter@kbouffardDN