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$1.5B DMC deal close set for Friday

The Detroit News, December 30, 2010

On Friday, the Detroit Medical Center should be part of the Vanguard Health Systems, capping months of work and a $1.5 billion deal that will bring new investment to the DMC's eight hospitals. Under the deal: Vanguard pays off about $391 million in DMC debt; Vanguard assumes the DMC's unfunded pension obligations and malpractice liabilities, expected to be as much as $335 million; and it provides $850 million in capital improvements to the DMC's hospitals. The sale will turn the state's largest safety net system into a for-profit operation. DMC and Vanguard have been working to secure final approvals required to close the deal transfers of Medicare and Medicaid provider numbers that will allow Vanguard to receive reimbursement for Medicare and Medicaid patients. More than half of the DMC's patient revenue comes from Medicare and Medicaid, and Vanguard said it can't afford to go a day without that revenue in Detroit.