Detroit Hospital Merger Cancelled - UPDATED

CHICAGO - A major Detroit-area hospital system merger is off after Henry Ford Health System cancelled its planned $6.6 billion deal with Beaumont Health late Tuesday.

The announcement came days after the systems had said they were extending the time to discuss the consolidation.

But the 20-member Henry Ford board Tuesday voted to drop the plan.

In a letter to employees, Henry Ford CEO cited different perspectives.

"This decision was made because it became apparent that two very different perspectives had emerged for the new organization," CEO Nancy Schlichting wrote in the letter.

The Detroit-area providers signed the original letter Oct. 31, and it was to last for six months, through May 15. They hoped to finalize the agreement by the middle of May and close the deal by the end of the summer.

Crain’s Detroit Business recently reported that five clinical chiefs at Beaumont formally submitted a letter to the Beaumont board of directors asking it to reconsider the merger. The board tabled a discussion for three weeks to conduct due diligence on physician opposition, according to Crain’s.

If the merger had gone forward, the new system would have featured 10 hospitals, 200 patient sites, 38,000 employees, and $6.4 billion in annual operating revenue, commanding up to 40% of the Detroit-area market.

The combination was seen as helping the systems deal with looming capital costs -- most tied to information technology -- and reimbursement cuts that are part of the new federal health care law, officials said last year when they announced the plan.

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