St. Luke's Hospital to merge with Michigan-based McLaren Health Care
By Jay Skebba / The Blade
Wed, 04 Dec 2019 15:11:05 GMT
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St. Luke’s Hospital announced on Wednesday that it is being acquired by Michigan-based health provider McLaren Health Care and will become McLaren’s first hospital outside of Michigan.
The Maumee facility and McLaren, headquartered in Grand Blanc, have signed a letter of intent under which the Michigan health provider will become the sole shareholder of St. Luke’s. Hospital President and CEO Dan Wakeman said the deal is key to maintaining quality care.
“We’ve been known as a low-cost provider for a long time,” Mr. Wakeman said. “Our quality is really strong and you see that in national and state comparatives. So if we can maintain that, it’s better for every human living around here. McLaren gives us the key resources to do that going into the future.’’
St. Luke’s sent a letter of interest to 15 major health care systems in the Midwest and narrowed the list to 10, and eventually two. Mr. Wakeman said McLaren “rose to the top” for two main reasons: The ability to recruit and maintain staff through medical schools and training programs, and the ability to provide strategic capital and innovative methods to lower costs and improve quality.
McLaren President and CEO Phil Incarnati said the merger could take up to six months to complete.
“I wouldn’t characterize it as ‘taking over,’” Mr. Incarnati said. “In a nonprofit legal structure, McLaren becomes what is known as the corporate member or shareholder. But I think more importantly, we have a number of hospitals in the system that are wholly owned subsidiaries. Under our structure, St. Luke’s would become the same.”
McLaren is a network with 14 hospitals, ambulatory surgery centers, imaging centers, 490 employees primary and specialty care physicians, commercial and Medicaid HMOs, home health, and hospice providers serving Michigan and Indiana.
As part of the potential integration, McLaren Health Care will make a $100 million to $120 million investment in St. Luke’s, according to Mr. Incarnati. The investment includes building a cancer center and an orthopedic, neuro, and spine center, along with infrastructure upgrades.
Mr. Wakeman said jobs will change for many hospital employees, but believes staff numbers will increase over time. He said a new cancer center would be beneficial to the area.
“We cut a lot of cancer out in our surgical suite, but we don’t do chemo or radiation,” Mr. Wakeman said. “With this relationship, that’s a whole new service line we’re not even engaged in right now.”
Mr. Wakeman said a potential name change for St. Luke’s is “to be determined.”
The Blade reported in September that St. Luke’s — located on Monclova Road — hired a national health care consultant to evaluate its strategic and financial position. In 2010, the hospital attempted to merge with ProMedica in the midst of financial issues.
The Federal Trade Commission ruled against the merger in 2011, claiming it violated anti-monopoly laws and would have driven up costs for consumers.
Staff Writer Alexandra Mester contributed to this story.