Detroit Receiving Hospital

Running this DMC takes more than 3,000 physicians and a staff of thousands. With more than 2,000 beds, the Detroit Medical Center serves patients in southeastern Michigan through eight hospitals and numerous outpatient facilities, as well as DMC University Laboratories, which provides clinical laboratory services to the medical system. DMC is a teaching and clinical research site for Wayne State University. The medical center's specialized services include cardiology, orthopedics, rehabilitation, and organ transplants. DMC was acquired by Vanguard Health Systems in a deal worth about $1.3 billion. Vanguard's investment in DMC was a shot in the arm for the struggling hospital and the City of Detroit.

Ownership

When the deal closed in late 2010, DMC became owned and operated by a Vanguard subsidiary known as VHS Michigan. The buyout of DMC by for-profit, Nashville-based Vanguard promised to provide $850 million for capital improvements to DMC's eight-hospital system. Vanguard also made a 10-year pledge to keep all DMC hospitals open and maintain DMC's charity-care policies.

Strategy

DMC, which struggled to raise money for capital improvements before its sale, announced the start of eight construction projects with contracts totaling $60 million soon after the deal closed. Upgrades include a new Children's Hospital of Michigan specialty center, which opened in June 2012. The $43 million specialty center was the first project completed following Vanguard's $850 investment. Others still in progress include the doubling in size of the Sinai Grace emergency room, a renovation of the Harper University Hospital operating room, and new physician office buildings, among other improvements and upgrades.

DMC is one of the only health care systems in the region to operate a fully-implemented electronic medical record system (EMR) at all of its hospitals. By becoming an early-adopter of such technology, DMC became eligible to receive certain incentive payments from the federal government. It also puts itself way ahead of the curve when it comes to EMR implementation, which is expected to be required of all health care systems by 2014.