Granholm, Ficano & Kilpatrick Sign Agreement With DMC; Services at Receiving, Hutzel Saved

Contact: Liz Boyd 517-335-6397

July 21, 2003

LANSING – Governor Jennifer M. Granholm, Wayne County Executive Robert Ficano, and Detroit Mayor Kwame Kilpatrick today announced that they have signed an agreement with the Detroit Medical Center (DMC) that will ensure the continuation of services at Detroit Receiving and Hutzel Women’s hospitals, two critical safety net providers in Southeast Michigan.

As a result of the agreement, by July 25, the DMC will rescind the notices of potential layoffs that were issued in June under the federal WARN Act.  As many as 1,000 employees were notified of potential layoffs; the agreement preserves those jobs.

“Hundreds of thousands of people in Southeast Michigan depend on the safety net of doctors, nurses, and other medical personnel who staff Detroit Receiving and Hutzel Women’s hospitals,” Granholm said today.  “These hospitals are critical providers of health care services in the region – especially to those who have nowhere else to turn for their health care.  I am pleased we have taken steps to ensure their solvency.”

"My original intent was to guarantee continuation of care, protection of the public dollar, accountability, and restructuring,'' Ficano said.  “This agreement accomplishes that for the citizens of Wayne County.''

“I made a commitment to Detroiters that we would do everything possible to save Detroit Receiving and Hutzel hospitals because of the critical nature of the services they provide to our citizens,” said Kilpatrick. “Not only do these facilities provide first-rate services for trauma patients and high-risk pregnancies, they also serve as a first-rate training ground for some of the nation’s most talented physicians.”

Last week, Governor Granholm and state lawmakers approved the 2004 state budget that paved the way for up to $50 million for a new supplemental fund to help the DMC meet budget shortfalls at Detroit Receiving and Hutzel hospitals during the next 10 months.

The fund will include up to $15 million in state funds, $4 million in county funds, and $3 million in city funds, along with $28 million in federal matching dollars.  Under the Temporary Oversight and Corporate Responsibility Memorandum of Understanding announced today, a new temporary oversight committee will administer the funds, making revenue available to the DMC on a monthly basis once the committee has determined sufficient financial need.

The committee will be appointed within the week and will be comprised of two appointees each by the Governor, County Executive, and Mayor.     

As part of the new agreement, the DMC Board will have 30 days in which to adopt a comprehensive and substantive policy that prohibits potential conflicts of interest on the part of board members and managers.

The DMC Board will be required to conduct a review of its management and board structure and present the results, along with revised corporate governance documents, to the oversight committee.   The board will be required to conduct auditing activities based on the provisions of the new federal Sarbanes-Oxley Act, a law that regulates appropriate private sector corporate governance.   

Detroit Receiving Hospital handles 85,000 emergency room visits each year and is Wayne County’s only American College of Surgeons certified level-one trauma center, with the capability to handle major bio-terrorism incidents or serious burn victims.  Hutzel Women’s Hospital annually delivers approximately 5,800 newborns and has a specialty center equipped to handle high-risk pregnancies.

Today’s announcement ensures that these hospitals will continue operating at their current capacities until a mechanism for stabilizing the health care safety net in Detroit is identified by the Detroit Health Care Stabilization Workgroup that was established by Governor Granholm with input from Wayne County and the City of Detroit.  Its recommendations are due at the end of July.