Spectrum, Beaumont hospital systems sign merger deal
Spectrum Health and Beaumont Health have signed a merger agreement that would combine a health insurance company and 22 hospitals into one tax-exempt system with almost $13 billion in annual revenue.
Why it matters: This deal would form the largest hospital system in Michigan, raising new concerns about what would happen to hospital and physician prices if the merger is ultimately approved.
Between the lines: This is Beaumont's third attempt at a large-scale merger since 2019. Talks with two out-of-state systems, Summa Health in Ohio and Advocate Aurora Health in Illinois and Wisconsin, fell apart.
By the numbers: The coronavirus pandemic led to large drops in hospitalizations, procedures and tests at hospitals. But the pandemic did not affect Spectrum's financial position. And Beaumont, which treated more COVID patients than any other hospital system in Michigan, managed to stay well above water, according to financial documents.
- Spectrum: Revenue soared 14% to $8.3 billion in 2020, and operating income jumped 24% to $412 million.
- Beaumont: Revenue dropped 3% $4.6 billion in 2020, and operating income fell 10% to $167 million.
- The two systems, combined, are sitting on more than $8 billion of cash and investments as of March 31 of this year.
- Bailout dollars: Spectrum has received $198 million, and Beaumont has received $387 million through the federal government's various bailout funds earmarked for hospitals, doctors and other providers during the pandemic.