September 13, 2020 / Susan Morse, Managing Editor
A former trustee for Beaumont Health wants the Michigan Attorney General to intervene in hospital operations and direct the board of directors to fire the CEO and other top hospital executives and also to stop the hospital’s planned merger with AdvocateAurora Health.
In the letter former trustee Mark Shaevsky singles out CEO John Fox, COO Carolyn Wilson and CMO Dr. David Wood. The AG’s office should require or suggest that the board of directors terminate the employment status of the top executives, Shaevsky said, suggesting the CEO, COO and CMO be given appropriate severance arrangements consistent with their employment contracts.
Shaevsky said he has two concerns. The first is that if Beaumont, based just outside of Detroit, is taken over by the Chicago-based AdvocateAurora, it would be trading $5 billion in annual revenue for AdvocateAurora’s promise of $1 billion in capital improvement funds. Beaumont is in a strong enough cash position and has an excellent credit rating, so it could borrow any necessary funds, he said.
Beaumont is among Michigan’s largest healthcare systems.
In the five-page letter, Shaevsky addresses what he calls the “disingenuous” characterization of the deal as being a partnership, and not as a sale to Advocate.
“However, under the ‘partnership,’ Beaumont would give up its 100% independence as a community hospital in Michigan to become a minority partner – one-third (33⅓%) – in a corporation to be dominated by the other two parties, especially the Advocate system in Chicago (and whose CEO is planned to be the CEO of the ‘partnership’),” Shaevsky wrote.