Tennessee Company Set to Purchase DMC

[French777]

http://www.clickondetroit.com/news/22885498/detail.html

Looks like they are planning a major investment!

[DetroitPlanner]

Either that or with the new health care bill they figure that the time is right to make money off of poor people.

[kenp]

Either that or with the new health care bill they figure that the time is right to make money off of poor people.

You mean make money off the people that support poor people?

[DetroitPlanner]

You mean make money off the people that support poor people?

That too, the poor and disenfranchised will be the major benefactors of a health care bill, to mee it looks like the vultures that have already created massive hospitals like Povidence in Novi, Henry Ford West Bloomfield, Gynesis in N Oakland, Beaumont II of Troy/Rochester went after the creme when there was only good insurance for the middle to high incomes now see the underserved as an enormous market to exploit.

[spiritofdetroit]

This would usually be frightening to me, but it seems there are many safeguards in place to protect the city. Good job by Duggan, Bing, and Ficano.

-Vanguard must keep all DMC hospitals open for at least 10 years
- New emergency room for Sinai-Grace
- New tower for Children's
- New beds and renovations at Receiving
- New lobby and upgrades at Harper
- Supposedly the largest private investment in the city's history
- Commitment to maintain charity care for 10 years
- DMC board is retained to oversee Vanguard and enforce commitments
- 10,000 jobs created [[mostly one time construction $$)
- $800 million spent in the City of Detroit

[DetroitScooter]

Another jewel, gone!

[p1acebo]

This would usually be frightening to me, but it seems there are many safeguards in place to protect the city. Good job by Duggan, Bing, and Ficano.

-Vanguard must keep all DMC hospitals open for at least 10 years
- New emergency room for Sinai-Grace
- New tower for Children's
- New beds and renovations at Receiving
- New lobby and upgrades at Harper
- Supposedly the largest private investment in the city's history
- Commitment to maintain charity care for 10 years
- DMC board is retained to oversee Vanguard and enforce commitments
- 10,000 jobs created [[mostly one time construction $$)
- $800 million spent in the City of Detroit

How did you acquire all those details? I don't remember seeing them in the article last night. In addition... after the 10 years do you think that they would actually plan on closing some of the hospitals? I would hope not.

[daddeeo]

Either that or selling them. Remember they are a for profit hospital.

[Kevgoblue]

Either that or with the new health care bill they figure that the time is right to make money off of poor people.

Sounds par for the course of what we've been seeing out of the corporate world lately. But provided that some type of health care bill passes and a new class of customers will be created, why would DMC sell? Why let someone else skim off all the impending profits?

[DetroitPlanner]

Sounds par for the course of what we've been seeing out of the corporate world lately. But provided that some type of health care bill passes and a new class of customers will be created, why would DMC sell? Why let someone else skim off all the impending profits?

Lets see... If various local govts would have to sign off on this, would this not help the local govts infuse themselves with a fair return on investment at a time when they are posting record shortfalls? Local govts also have to be wondering based upon all of these shortfalls why they are tied up into something like medicine in the first place and could be looking at this as a way to rationalize what local govt does; and focus more on providing police and infrastructure.

[RO_Resident]

How did you acquire all those details? I don't remember seeing them in the article last night. In addition... after the 10 years do you think that they would actually plan on closing some of the hospitals? I would hope not.

Those details are in the Vanguard/DMC press release:
http://www.marketwire.com/press-rele...nt-1134561.htm

The Letter of Intent [[LOI) has six major provisions:

1) Vanguard will acquire all of the DMC System's assets [[other than donor
restricted assets) for a purchase price that includes approximately
$417 million to retire all outstanding DMC bonds and other long-term
indebtedness and also requires Vanguard to assume all DMC liabilities
[[other than such bonds and long-term indebtedness).
2) DMC will be owned and operated by a Vanguard subsidiary known as VHS
Michigan. VHS Michigan will establish a regional advisory board to
oversee the conduct of the DMC hospitals, consisting of 4 members
appointed by Vanguard and 3 appointed by the DMC Board. The hospitals
will continue to operate under the DMC brand and their historic names.
3) Vanguard has made an extensive commitment to support the historic
safety net mission of DMC, including a 10 year commitment to keep all
hospitals open and to maintain DMC's charity care policy.
4) Vanguard has agreed to spend $850 million in capital investment in DMC
over the next 5 years, more than $800 million in the City of Detroit.
$500 million will go for a specific project list agreed to by the DMC
Board, including a new Children's Hospital tower, new modern patient
units at Receiving, doubling of the Sinai Grace emergency room, a major
renovation of OR space at Harper, and new physician office buildings at
Harper and Sinai Grace. The other $350 million will be for ongoing
repairs and capital and equipment needs at DMC.
5) The existing DMC Board chaired by Steve D'Arcy will remain in place and
administer the existing $140 million in charitable funds given to DMC
over the years and will make sure all donor funds are spent as
originally intended. The DMC Board will also have the legal right to
enforce Vanguard's commitments under the purchase agreement.
6) The agreement is conditioned on the approval of a Wayne County
sponsored Renaissance Zone for DMC's Central Campus, which will require
state, city, and county approvals.

[Hypestyles]

hmm... I just hope that the hospital's programs aimed at low-income familes and children are maintained.. I remember hearing about that 'high-end care' $$$ hospital built in Bloomfield Hills or somewhere that opened in the last year or so.. I hope it's not a trend for urban hospitals..

[REL]

I am encouraged to see the pending investment dollars for Detroit!

[bartock]

Sounds par for the course of what we've been seeing out of the corporate world lately. But provided that some type of health care bill passes and a new class of customers will be created, why would DMC sell? Why let someone else skim off all the impending profits?

Dunno, but this will be great for Detroit. From what I understand, the DMC central campus is an empowerment zone and so there are big tax credits also at stake here [[why city counsel approval will be needed). However, Sinai-Grace will start paying taxes as the DMC goes for-profit and eventually the rest of the DMC will also. I'll keep my feeling on the health care bill to myself, but from a purely business perspective it would be a boon to the DMC and city coffers.

[lilpup]

Ten years isn't very long for an entity the size of DMC. I certainly hope the purchaser plans to stick around longer than that or else the area will be royally screwed.

[Gistok]

Wait a minute... aren't "for profit" hospitals banned from Michigan? I could see a for profit hospital corp. owning hospitals in Michigan... but they would have to be run as non-profit. Has that state law changed?

[bartock]

Wait a minute... aren't "for profit" hospitals banned from Michigan? I could see a for profit hospital corp. owning hospitals in Michigan... but they would have to be run as non-profit. Has that state law changed?

I did not know that all for-profit hospitals were banned from Michigan. However, non-profit hospitals in Michigan do pay taxes.

[Gistok]

I did not know that all for-profit hospitals were banned from Michigan. However, non-profit hospitals in Michigan do pay taxes.

Bartock, "banned" may be too strong a word... but check out this website [[although it is a dated 1998 document)...

http://www.michiganinbrief.org/editi...s/issue-34.htm

The 4th paragraph down on "BACKGOUND" mentions that Michigan has no "for profit hospitals".

[Lowell]

Who "owns" the DMC [[I thought it was a not for profit), how can it be sold and who gets the money for it?

[spiritofdetroit]

There are very specialized accounting and legal rules for the sale of a nonprofit, however, from the information released in this case, the "sale" proceeds go straight towards all of the DMC's outstanding bonds/debt, etc.... It will be interesting to see the specific terms - as it relates to physical assets

[bartock]

Bartock, "banned" may be too strong a word... but check out this website [[although it is a dated 1998 document)...

http://www.michiganinbrief.org/editi...s/issue-34.htm

The 4th paragraph down on "BACKGOUND" mentions that Michigan has no "for profit hospitals".

I jumped the gun on certain assumptions because I spoke with someone of historical credibility at the DMC yesterday [[as Drew and Mike would say - "oooohhhh" sarcastically) who said that Sinai Grace "will start paying taxes immediately" assuming everything goes through - today's Free Press has great information on the hows and whys of the sale.

I don't know if Duggan was ever quoted in a publication saying this, but apparently his goal when he took over was to turn the DMC into a Cleveland Clinic type of institution [[at least by reputation...I don't know how their business works).

[RickBeall]

Vanguard will be looking real smart if the healthcare legislation passes this Sunday.

[Lowell]

Rick you nailed it. Once the big bulk of the uninsured become covered [some say it will be 35 million] there will be a pent of demand for health care. A large percentage of them are in need of important, but non-life threatening, maladies and currently cannot afford it or can't get coverage due to pre-conditions.

All medical institutions will get hit with that catch-up wave and make a lot of money. There is a price to pay for the decades of national health neglect. If you have insurance and have beein putting off some procedure, you should get it done now.

[Gistok]

Lowell... under that scenario wouldn't it be nice if St. John Healthcare re-opened Riverview Hospital near the MacArthur Bridge?

[Pcm]

An article today mentioned the designation of the DMC campus and immediate surrounding area to be designated a Renaissance Zone, meaning it tax exempt for business and residents.

What I'm interested in is if that means that residents of a Renaissance Zone are city income tax exempt, or just state income tax exempt?