Henry Ford Health, Ascension Michigan’s JV going strong nearly 1 year in

Now half way through the year, Detroit-based Henry Ford Health is still reaping the rewards of a financially sound fiscal 2024, after seeing a major leap in operating income last year, up to $294.2 million from $80.5 million in 2023.

Robin Damschroder, executive vice president, president of value-based enterprise and CFO of Henry Ford Health, said during a Becker’s CFO+Revenue Cycle Podcast episode that success can be attributed to early gains from the system’s joint venture with Ascension Michigan, strong performance from its Health Alliance Plan insurance arm and strategic cost containment. 

“First and foremost, we had some early wins in our joint venture with the Ascension Michigan facilities,” Ms. Damschroder said. “Those benefits came early. They were things from changing our group purchasing organization, so we got some rate wins on our contracts. For example, almost $35 million.”

Henry Ford Health launched its joint venture with Ascension Michigan on Oct. 1, 2024, bringing around 50,000 employees across more than 550 sites in Michigan under Henry Ford Health’s wing. 

As the joint venture integration continues, Ms. Damschroder said a key focus is merging five electronic medical record platforms into Henry Ford Health’s platform. 

“Collectively, we are working on about $250 million in what we call ‘tier-one synergies,” she said. “We have worked through integrating and getting to our shared governance set up. A lot of our focus originally … has been around cultural alignment. How can we gain quick operational efficiencies together and really getting some of those quick wins while we work at this larger technology transformation.”

Following the passage of the One Big Beautiful Bill Act, Ms. Damschroder said the system did a significant amount of scenario planning, and reviewed each initiative carefully. 

The legislation is expected to decrease Medicaid spending by nearly $1 trillion, with the number of uninsured individuals expected to increase by 11.8 million by 2034, according to the  Congressional Budget Office.

“When we look at it, the implications are a bit above the median of what we could have expected, but certainly not the worst-case scenario that was out there,” she said. “[Some] of these regulations, particularly when it comes to eligibility, work requirements and redetermination, the states are going to decide on sort of the final implementation rules. Michigan might experience something different than in Indiana or California or Texas. So we anticipate we might see some of those in 2026 and 2027 but the major, major cuts are expected to happen 2028 to 2032.”

Ms. Damschroder offered three pieces of leadership advice as healthcare leaders work to understand the legislation’s impact on their organizations.

“It’s about transparency and collaboration,” she said. You’ve got to prioritize open communication and cross functional teamwork at this time, followed by strategic investment. Even as we’re looking at cuts, we’re going to have to make key investments in order to get at the savings that we’re going to need to reduce our cost structures. Finally, we’ve got to adapt, right? We’ve got to adapt our structures. Sometimes it’s times like this, when you look at a crisis and see all the challenges, it really brings you opportunities that you haven’t been able to push past. I think we have the opportunity from a leadership perspective to step up.”