Ascension Borgess Kalamazoo, 3 other hospitals to be sold to Indiana-based health system

KALAMAZOO, MI — Indiana-based Beacon Health System has reached a definitive agreement to acquire the Ascension health care system in Southwest Michigan.

The agreement, expected to close this summer, includes the acquisition of four hospitals, 35 outpatient clinics and an ambulatory surgery center.

The hospitals being acquired include:

• Ascension Borgess Hospital in Kalamazoo
• Ascension Borgess Allegan Hospital
• Ascension Borgess-Lee Hospital in Dowagiac
• Ascension Borgess-Pipp Hospital in Plainwell

According to Beacon Health CEO Kreg Gruber, Ascension approached Beacon last fall, about a year after the merger of Ascension Michigan’s other hospitals with Henry Ford Health.

“Beacon Health System’s primary focus is to deliver outstanding care to our communities,” Gruber said. “Expanding our reach deeper into Southwest Michigan broadens access to high-quality, affordable care for communities served by Ascension, extends our service area and provides growth opportunity to further strengthen the health system.”

Beacon Health was established in 2011 as the result of a merger between Memorial Hospital of South Bend and Elkhart General Hospital.

In the 14 years since, it has grown “organically and opportunistically,” Gruber said. Inspired by a community-driven, local-governance approach, the health system has since acquired a critical care facility in Bremen, Indiana, and Three Rivers Health in Michigan.

“We believe in strengthening local health care and we’ve done that,” Gruber said. “Bremen is more successful today than they have ever been.

“They are seeing more patients than they have ever seen. They’ve hired more employees than they’ve ever had and it’s because we believe in making it a stronger health care organization.”

The same thing, Gruber said, has happened since Three Rivers Health joined the fold. Investments in the facility, technology and people have all led to the hospital treating more patients than ever before.

As the organization prepares to acquire four hospitals and 35 outpatient clinics in Southwest Michigan, Gruber said he looks forward to working with each local community to improve existing facilities.

“We don’t believe bigger is better, we believe better is better,” he said. “Our philosophy is that if it is going to work, it is going to work locally.”

The largest facility in the acquisition, Ascension Borgess in Kalamazoo, consists currently of 422 beds, 2,700 associates and 261 providers.

“We are not interested in coming in and stripping out services,” Gruber said. “We’re interested in coming in and building services.

“Over the years, at least from what we have seen, Borgess has lost or not been able to retain some of the key physicians and staff that really make a health care organization successful. We’ve had a really great track record at Beacon of recruiting great talent and keeping it and I would say a lot of that has to do with our leadership and governance model. We’ll bring those same approaches to these same organizations.”

Gruber said organizational leaders will work overtime to integrate the new hospitals and clinics into their culture over the coming months.

“I think relationships are important,” he said. “I have an open-door policy. Any employee can email, walk into my office or say, ‘Hey, I’d like to talk to Kreg.‘”

From a patient perspective, both Beacon and Ascension use the Cerner electronic health record system.

Beacon is advanced in terms of patient-facing digital scheduling, Gruber said. Ascension’s hospitals will be streamlined to match.

“I think there will be some positive things they will notice,” he said. “Our goal is that those changes, even if they are hard at first, will ultimately bring satisfaction and value to people.”

Borgess has served Southwest Michigan for more than 135 years, so change will be inevitable.

The teams at Beacon Health System and Ascension are committed to working together to ensure a smooth transition for team members, physicians and consumers, officials said in a joint statement.

Current Ascension patients can expect to continue to receive the same level of care from the providers they trust, with minimal, if any, disruption to care and community services prior to and after the closing, according to the company.

“As a regional provider, Beacon Health System is positioned to serve patients through an integrated care delivery system to ensure that Southwest Michigan has access to sustainable, quality health care long into the future,” said Scott Cihak, Chief Operating Officer of Ascension Michigan.

“After an in-depth review, we found that our organizations are well-aligned culturally, which will streamline the integration process,” he said. “Our communities are in good hands.”

The transaction still needs to be approved by the attorneys general in Michigan and Indiana.

Beacon officials declined to disclose the sale price.

“We are thankful for our partnership and long history of collaboration with Ascension Borgess,” said Laura Eller, spokesperson with the Western Michigan University Homer Stryker M.D. School of Medicine. “We look forward to forging a strong relationship with Beacon Health System as we remain committed to our vision for health equity and our mission providing medical education, patient care, and research through community partnerships.”

To learn more about the acquisition, visit beacon.health/bright-future.

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