Nonprofit Newswire | Detroit Medical Center Sale Challenged

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March 30, 2010: Detroit News | The interest of for-profit equity firms in acquiring nonprofit hospitals due to the different operating environment emerging through national health care reform will not be without controversy. The proposed acquisition of the Detroit Medical Center by the for-profit Vanguard Health Systems (owned by the Blackstone Group) has been challenged by a number of health advocacy organizations in Michigan, including the Metropolitan Organizing Strategy Enabling Strength (MOSES), the Michigan Universal Health Care Access Network, and Michigan Legal Aid.

Pensella Hardaway of MOSES said, “We want to make sure this is not a quick fix and in the long run it’s not going to hurt us.” The head of the Michigan Universal health Care Access Network expressed concern whether the nonprofit assets of the hospital would be valued correctly and whether they would stay in Detroit.

But nonprofits don’t necessarily speak with one voice. Obviously the Medical Center is pleased with the acquisition. And so is Wayne State University, whose School of Medicine is excited about the prospect of improved and new facilities for training its students.

The Michigan Attorney General, Mike Cox, is going to have to go through the advocates’ questions and make some hard decisions. Other nonprofit hospitals and other states will be watching for guidance and precedents for future for-profit acquisitions.—Rick Cohen