
Beacon Health System, based in Indiana, has closed its acquisition of Ascension’s Southwest Michigan Regional hospitals, along with associated facilities, for an undisclosed financial amount.
In an announcement, Beacon said the move expands the reach of the nonprofit health systems into more communities across northern Indiana and southwest Michigan.
Beacon now operates four additional hospitals, 35 outpatient clinics and an ambulatory surgery center in southwest Michigan. These hospitals include Beacon Kalamazoo (formerly Borgess), a 422-bed acute care hospital, along with Beacon Allegan (formerly Borgess Allegan), Beacon Dowagiac (formerly Borgess-Lee) and Beacon Plainwell (formerly Borgess-Pipp).
WHAT’S THE IMPACT
Beacon announced the definitive agreement to acquire these facilities in April. The completed acquisition brings more than 2,700 associates, including 259 providers, into the health system.
CEO Kreg Gruber said the acquisition “represents our continued commitment to strengthening health care in our region,” adding that patients will benefit from an expanded network of services and providers.
He also predicted it would allow patients in southwest Michigan greater access to specialized services.
Beacon also is becoming a partner with Western Michigan University Homer Stryker M.D. School of Medicine, home to more than 240 residents and fellows in 14 programs, in a move meant to enhance the system’s focus on medical education and training.
The health system said this strengthens its ability to recruit top talent and provide career opportunities for associates. Additional specialists, enhanced resources and coordinated care throughout the expanded health system are some of the advantages Beacon expects to come from the announcement.
THE LARGER TREND
A Kaufman Hall blog post from Managing Director Lisa Goldstein published in January showed that more nonprofit hospitals experienced credit downgrades than upgrades in 2024, though the difference between the two is not as great as it has been in previous years.
Goldstein reviewed the rating actions published by three credit agencies – Moody's, S&P and Fitch – and said they collectively downgraded 95 facilities and upgraded 37 in 2024, compared with 116 and 33, respectively, in 2023.
Many of the downgrades occurred because expenses exceeded revenue growth, she said, despite the decline in use of contract labor and a recession of volumes back to prepandemic levels.
Most of the upgrades were due to lower-rated hospitals becoming merged into higher-rated systems, while many downgrades were due to outsized increases in debt-to-fund growth strategies.
Email: jlagasse@himss.org
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