In March 2010, when Detroit Medical Center’s (DMC) Board of Directors announced its plans to transition from non-profit to for-profit, it was the biggest healthcare industry news to hit the region in a long time. That’s understandable. The DMC/Vanguard Health Systems Partnership is quite likely the most inventive effort to date to deal with securing the future of quality healthcare in an aging, urban infrastructure.
Finding new ways to compete is nothing new to Detroit Medical Center’s leadership. The system has been pressed to the wall many times over the last decade and survived. DMC has ended the last seven years but just barely in the black and it’s hard to build a hospital system of the future on that kind of budget.
The non-profit model, which has seen the city lose 13 hospitals over the past two decades, no longer works for DMC, said Mike Duggan, president and CEO of the eight-hospital system.
“This deal with Vanguard Health Systems will bring $850 million to pay for physical improvements, another $417 million to retire all outstanding DMC bonds and other long-term debts, a continuation of our charitable care policies, jobs in construction and development, and a residual economic boost in and around the DMC campus,” Duggan said.
The DMC’s physicians, nurses, researchers and support staff represent the best of the best in healthcare, and yet some 40 percent of new prospective patients who live in and around Detroit bypass the DMC and take their healthcare dollars to the suburbs.
“When we put new world-class facilities behind our world-class staff, we’ll be able to compete,” Duggan said. “We’ll create a new skyline for our DMC campus, with glass and steel towers, pedestrian skywalks and other enhancements. This is what our patients, our employees and our city deserve.”
Over the next five years, new construction and upgrades will include:
• A new 175,000 square foot Children’s Hospital, and a new four-story Pediatric Specialty Center
• $28 million in upgrades to DMC Detroit Receiving Hospital, the city’s historic safety net facility, and the area’s first Level One trauma center
• Emergency Department expansion, new outpatient building, front entrance redesign, and other upgrades totaling $77 million at DMC Sinai-Grace Hospital.
• A new Cardiovascular Institute and Outpatient Specialty Building at DMC Harper University/Hutzel Women’s Hospitals, plus other patient room and lobby upgrades
• $350 million for routine capital expenditures, including new technology and medical equipment
Both the Wayne County Commission and the Detroit City Council have agreed to enterprise zone status for the proposed deal, which must still gain approval from the Michigan Attorney General.
Conrad Mallett, Sinai-Grace Hospital president, said DMC has a moral and ethical responsibility to do whatever it can to ensure quality care for families throughout the region.
“DMC has held this mission and obligation far too long to abandon those who depend on us when they or their loved ones are ill,” Mallett said.
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