U of M Health System and Allegiance Health Announce Intent to Affiliate

Proposed broad-based affiliation would strengthen their ability to serve Jackson County and surrounding communities, build on existing relationships in key specialties, and position both systems for new health care environment.

ANN ARBOR and JACKSON, Mich. — The University of Michigan Health System (UMHS) and Allegiance Health have signed a letter of intent to affiliate, with Allegiance Health becoming a member of the UMHS network. Combining their expertise and services would create better health and well-being at every stage of life for the patients served by Allegiance Health.

For nearly 100 years, the people of Jackson County, Michigan and the surrounding communities have turned to Allegiance Health for high-quality health care. With the proposed affiliation announced today, Allegiance Health will strengthen its ability to continue this tradition by joining UMHS.

The proposed affiliation would expand on existing collaborations between the two health systems. Over the coming months, the full details and terms of the proposed affiliation will be announced, in consultation with key stakeholders and in compliance with regulatory requirements.

At the successful conclusion of the process, Allegiance Health would become part of the University of Michigan Health System and of the University of Michigan. The new relationship would position both institutions to better and more efficiently serve patients and the community in a rapidly changing health care environment.

“Together, UMHS and Allegiance Health will build on our non-profit legacies of quality care to provide even greater value to patients and sustainable health improvement for all, including underserved populations,” said Georgia Fojtasek, R.N., Ed.D., president and CEO of Allegiance Health. “In UMHS, Allegiance Health has found a partner that shares our commitment and vision. By joining one of the state’s premier health care systems, Allegiance Health is building on our long-standing commitment to become a more effective and efficient organization, resulting in even higher quality and cost-effective health care for our community.”

Ora Hirsch Pescovitz, MD, CEO of UMHS and executive vice president for medical affairs at U-M, believes the proposed relationship between Allegiance Health and UMHS will help patients receive care in the location best for them, which is often close to home.

“We know how important Allegiance Health is to the Jackson community, and how dedicated its staff and physicians are to the health of their neighbors,” she said. “Ultimately, our proposed partnership would provide enhanced and efficient care locally whenever possible.” 

Allegiance Health and UMHS already successfully work together to provide high-quality radiation oncology services to cancer patients and heart care for both adults and children. A U-M Medical School faculty member serves as medical director for the clinically integrated network that includes Allegiance Health and community-based physicians.

The proposed affiliation will give Allegiance Health enhanced access to new state-of-the-art technologies and data-driven care models, and enable physicians and other clinicians from both systems to work together to develop innovative approaches to patient care. It will also help Allegiance Health expand its services strategically, and coordinate care across the continuum of each patient’s needs. Allegiance Health would be able to achieve new efficiencies in operations and have better access to capital funding.

By working together with UMHS, Allegiance Health can make more efficient use of resources, thereby generating additional funds that will stay in the Jackson community. These funds, and others that will be made available to Allegiance Health through this affiliation, will enable UMHS to commit to $100 million in new strategic initiatives investment at Allegiance Health over the next seven years, in addition to satisfaction of routine maintenance and replacement capital requirements.

Under the proposed new structure, Allegiance Health leaders and local community members will continue to represent local interests on governance committees and influence the future of Allegiance Health, together with leaders from UMHS.

The new proposed affiliation is the latest in efforts by UMHS to collaborate with other health systems across the state – though the proposed relationship with Allegiance Health would be the first time UMHS has sought to bring another health system entirely into its structure.

“Through these local partnerships, patients receive higher value, because they receive the right care, at the right time, in the right place, and in the most cost efficient manner,” says Pescovitz. (For information on other UMHS affiliations, see http://umhealth.me/partaff.)

Throughout the U.S., health systems are seeking affiliations and alignment with other health systems and physician groups in order to prepare for new insurance payment models that require high quality of care for large populations of people.

With this proposed affiliation, Allegiance Health and UMHS will participate more effectively in new federal and state programs, such as accountable care organizations (ACOs) that incentivize health systems to provide better and more coordinated care for entire populations of patients while minimizing costs.

About University of Michigan Health System

The University of Michigan Health System is a national leader in advanced patient care, innovative research to improve human health and comprehensive education of physicians, health professionals and medical scientists. UMHS includes the 990-bed hospital complex and 40 clinical care locations of the U-M Hospitals & Health Centers, which attracts patients from every county in Michigan as well as from other states and nations. It also includes the U-M Medical School with its 1,700-physician Faculty Group Practice, and numerous research laboratories and projects funded by more than $430 million in research grants. UMHS has earned many recognitions for quality & safety from U.S. News & World Report, Truven Health, the Leapfrog Group and beyond. More information: www.uofmhealth.org

About Allegiance Health

Allegiance Health is a 480-bed community-owned health system in Jackson, Michigan. Allegiance complements traditional acute care services with mission-based services to support the care continuum for all members of the community. Through its Health Improvement Organization (HIO), Allegiance is also a national leader in forming community partnerships that innovatively address wellness and prevention needs in the community. Allegiance Health was named among America’s 100 Best Hospitals by Healthgrades. As a recipient of the Healthgrades 2013 Patient Safety Excellence Award, Allegiance places within the top 5 percent of all hospitals for its excellent performance in safeguarding patients from serious, potentially preventable complications during their hospital stay. As a recipient of the CareChex 2013 Patient Safety Award, Allegiance ranks in the top 10% in the nation for patient safety related to heart attack and heart failure treatment. More information: www.allegiancehealth.org

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