The Detroit Medical Center is going to be experiencing changes in the next few months.

On March 19, Vanguard Health Systems Inc. submitted their letter of intent to purchase the DMC. Vanguard is a hospital is based out of Tennessee.

The Detroit Medical Center, a nonprofit organization, operates eight hospitals, including Children’s Hospital of Michigan, Sinai-Grace Hospital, Kresge Eye Institute and Detroit Receiving Hospital. The DMC additionally has a partnership with the Barbara Ann Karmanos Cancer Center.

A large portion of the reason the deal has been supported by the DMC is the system’s small budget.

 “We’ve had to sit by and watch while West Bloomfield and Novi and Ann Arbor make huge investments in new modern hospitals and we’ve been frustrated we can’t do the same in the city of Detroit,” DMC CEO Mike Duggan said. “Now we can. Detroit will no longer take a backseat to anyone in the quality of our hospital facilities.

Representatives from the DMC insist the change in ownership will not have a negative impact on patient care. DMC board chair Steve D’Arcy said Vanguard’s pledged $850 million investment in the DMC over the next five years is a strong step forward for both the hospital system and the metro Detroit area.

 “It represents great confidence in the future of the City of Detroit,” D’Arcy said.

The investment over the next five years will go toward improvements to several of the hospitals. 

If a deal is reached between the DMC and Vanguard soon, ground could be broken on improvement projects as early as June.

Vanguard proposed to pay $417 million for all assets of the DMC system. Vanguard plans to open a Michigan subsidiary company called VHS Michigan to manage the DMC hospitals. 

The hospitals will continue to operate under the DMC brand name and the current individual hospital names.

Vanguard has pledged to keep each of the DMC hospitals open for at least 10 years. It’s unclear if the hospitals will remain open after the initial 10 year period.

The current board for the DMC will remain intact to ensure that Vanguard is holding up its end of the deal. 

Vanguard also currently operates 15 hospitals in Texas, Massachusetts, Arizona and Illinois.

Vanguard and the DMC have until June 1 to develop a final plan for the acquisition. 

As of right now, the letter of intent from Vanguard is nonbinding and may not result in a guaranteed deal between the two hospital systems. 

Any proposal regarding the merger must be approved by the boards of directors from both Vanguard and the DMC. 

A zoning ordinance would also have to be approved by city and state governments. 

Several local developers have speculated that the sale of the hospital systems will help create growth in the Midtown neighborhood in Detroit. 

Information on DMC is available at dmc.org.