New Legislation Paves Way for Regional Nonprofit Partnership in Michigan

Alpena Regional Medical Center (ARMC), a county-owned health system in northeast Michigan, has joined MidMichigan Health, a regional nonprofit health system affiliated with the University of Michigan Health System. ARMC will become the second largest medical center in the five-hospital MidMichigan Health system. The transaction is notable, in particular, because state law required that legislation be passed to convert the county-owned facility into a Michigan nonprofit corporation before joining MidMichigan. The transaction was also approved by the Alpena County Board of Commissioners.

As part of the system, ARMC will receive improved access to financial and non-financial resources, support for physician recruitment and retention, continued clinical quality improvements, and local and system-wide governance provisions, including two seats on the MidMichigan Health Board.

Juniper’s Role
Juniper was engaged by the Board of ARMC to conduct an assessment of its future strategic options in the face of the pressures of healthcare reform and Michigan’s ongoing hospital consolidation. The Board determined that seeking a partner would best ensure the long-term provision of quality healthcare to the communities that ARMC serves. Juniper executed a rigorous competitive process which elicited a wide range of potential partners and structures. Following the selection of a partner, Juniper assisted with the completion of confirmatory due diligence and the negotiation of the final agreement between the parties.

Due to state law governing municipal hospital facilities, ARMC needed to obtain special state legislation converting it from a county-owned hospital into a nonprofit corporation in order to join its partner of choice. As part of the transaction team, Juniper assisted the ARMC Board with the complexities of the legislative and county approval processes. Following passage of the state bill and approval by the county commissioners, ARMC was able to become a member of MidMichigan.

Alpena Regional Medical Center
ARMC is a 139-bed, governmental hospital located in Alpena, MI, in the northeast corner of Lower Michigan. ARMC serves a large, primarily rural area which covers 24 zip codes in six counties. It is a Sole Community Hospital, a Medicare designation based on its location, size, and distance from other hospitals. ARMC is the largest employer in Alpena, the commercial and cultural hub for the region. The system employs approximately 1,000, including 100 physicians, and is a major economic engine in northeast Michigan.

MidMichigan Health
MidMichigan is a five-hospital, regional nonprofit health system headquartered in Midland, MI. In 2013, the system became an affiliate of the University of Michigan Health System, a preeminent three-hospital academic medical system focused on patient care, education, and world-class research. MidMichigan covers a 20-county region and employs more than 7,200.

Additional Details
For additional details, please refer to the press release.