Deadline Detroit | Starkman: Beaumont Misfortunes Prove CEO Tina Freese Decker Unfit to Lead Michigan’s Largest Hospital System

The writer, Los Angeles freelancer and former Detroit News business reporter blogs at Starkman Approved.

By Eric Starkman

Tina Freese Decker

If there was an annual award for the health industry’s biggest idiot, I challenge anyone to nominate a more worthy recipient than Tina Freese Decker, CEO of Grand Rapids-based Spectrum Health.

Six months after Freese Decker’s acquisition of Beaumont Health from controversial former CEO John Fox, Metro Detroit’s largest hospital system is suffering from a pandemic of red ink. Spectrum reported that Beaumont’s operations have already racked up nearly $100 million in losses. Spectrum forecast a loss of $57.1 million, which is also a telling surprise.

For years, former Beaumont CEO John Fox was paid more than $6 million due to his supposedly shrewd financial management. It’s funny, we’re only now learning how badly Fox knocked Beaumont into the ground.

Spectrum also reported that Beaumont lost $253 million on its investments. “Not-for-profit” hospitals are expected to manage their investments conservatively, opting for boring short-term bonds and other low-risk investments.

Turns out, Beaumont’s reported $4 billion stash also dwindled by the time Fox handed the keys to Freese Decker. Spectrum’s financial statements show that cash and investments from the “acquisition” amounted to $3.2 billion.

That’s right, CFO Matthew Cow called Beaumont an “acquisition,” not a merger as Freese Decker and Fox led the media to believe. The promised “double headquarters” was also BS. All of Spectrum’s top executives are based in Grand Rapids, which is understandable since none of Fox’s top lieutenants remained with the company.

I imagine Fox lounging in one of his Atlanta or North Carolina mansions laughing hysterically at Michigan ruler Yahoo, who took Beaumont out of his hands and no doubt paid him millions in the framework of the agreement.

Fox previously revealed he spoke to more than 100 hospital systems in hopes of finding a corporate bride for Beaumont. Freese Decker grabbed the brass ring, but it was badly tarnished.

Financial Albatross

Fortunately, Freese Decker’s operations in western Michigan were healthy enough to allow Spectrum to turn in an operating profit of $119.7 million despite Beaumont’s losses. Spectrum was aiming for an operating profit of $156 million.

Still, Beaumont is clearly going to be a financial albatross on Spectrum’s operations for some time to come.

AG Dana Nessel and Governor Gretchen Whitmer were silent. (Deadline for Detroit artwork)

Spectrum’s takeover of Beaumont was a deal that should never have been allowed. If Michigan had a competent attorney general or a governor with an interest in health beyond abortion rights, the deal would have been derailed.

AG Dana Nessel was personally warned by Beaumont donor and former director Mark Shaevsky two years ago that Fox and his board buddies were to be fired, but she let the hospital system deteriorate, as did the governor of Michigan Gretchen Whitmer.

Instead, they allowed Spectrum to acquire Beaumont, creating Michigan’s largest hospital system, as well as the state’s largest employer.

As often happens when you merge two organizations, the weaker brings down the stronger.

That’s how Beaumont ended up in the sorry state he did. The once proud and respected hospital system merged with two others in 2015, paving the way for Fox, who was determined to sell Beaumont upon his arrival.

Spectrum’s PR spin

Spectrum released a statement to MiBiz about the dire finances that recall the BS Fox served during his seven-year tenure.

“Beaumont Health has been significantly impacted by these financial and workforce headwinds which have been particularly strong in Southeast Michigan (in the second quarter). Despite these challenges, our team members continued to deliver nationally recognized healthcare and we were able to make new investments in the market and attract new talent,” said Spectrum. “Although we face these current financial headwinds, we are confident that we will continue to effectively and successfully fulfill our mission in the communities we serve in Michigan.”

These “labour headwinds” should have been known to Freese Decker long before she took over Beaumont. Maybe they don’t teach that at the University of Iowa where Freese Decker got his Masters in Health Administration from, but when a hospital spends nearly $2 million like John Fox l did to intimidate nurses at its flagship Royal Oak hospital and derailed a unionization attempt, it creates bad blood.

John Fox and Carolyn Wilson

Working at Beaumont under Fox and its former COO Carolyn Wilson has been a hellish HR experience, and the pandemic has made it worse. Nurses and nurse anesthetists at Beaumont quit en masse, joining recruiting agencies that paid them more money and assured them better working conditions.

This allowed Beaumont nurses working alongside nurses to be paid significantly more money for the same work, prompting more nurses to leave. It’s a vicious circle, one I doubt Spectrum has figured out how to solve.

Why would Beaumont nurses want to stay on staff when they can make more money working at a recruiting agency? There is no longer any prestige in working at Beaumont.

Public warning ignored

Freese Decker can’t say she wasn’t warned.

After announcing the deal, former Spectrum CFO Michael Freed publicly alerted Spectrum’s board of directors that the deal could result in “massive financial loss”.

“When you sign the documents that will permanently change this region, your signature will forever hold you accountable for the repercussions,” Freed said in a letter he posted on LinkedIn.

It should send chills to the people of Grand Rapids that Spectrum’s president is Julie Fream, who was Beaumont’s vice president when Fox destroyed the hospital system’s once nationally touted reputation. About half a dozen former Fream board buddies also sit on the board of Spectrum, once controlled entirely by residents of Grand Rapids and western Michigan.

In another example of how Freese Decker resembles John Fox in seeking to deceive and distract, Spectrum has announced that it will provide Oakland University with $20 million over the next five years for a Beaumont Health Nursing Scholarships.

“The shortage of nurses in our state is a critical and complex challenge that must be solved with bold and collaborative solutions,” said Freese Decker, quoted by the Detroit Free Press. “We are extremely excited about the impact the BHSH Beaumont Health Nurse Scholar program will have on healthcare and for our communities. »

BHSH is what Spectrum calls its combined operations of Beaumont and Spectrum. The nursing scholarship will not solve Spectrum’s immediate nursing staffing issues.

Inexperienced nurses

A traditional Bachelor of Science in Nursing typically lasts four years. The Freep quoted Oakland University Dean of Nursing Judy Didion as saying it will take about a year to build the infrastructure until the school can begin admitting additional students.

This would mean that it will take at least five years for Spectrum’s nursing program to bear fruit, so it will do nothing to alleviate the current nursing shortage.

In addition, beginning nurses still have a lot to learn. Beaumont was once mostly made up of highly trained veterans, some of the best in health care.

Speaking of Oakland University, when Fox announced its ill-fated attempt to merge Beaumont with Chicago-based attorney Aurora, one of the few perks it touted was that attorney Aurora had agreed to move Oakland University’s William Beaumont School of Medicine on the Royal Oak campus of Beaumont. .

Why isn’t Freese Decker following up on this supposedly great initiative?

Fox also revealed in January that Beaumont planned to spend “significant dollars” embarking on a three-to-five-year plan to expand private bed capacity in the health care system.

Is it still on track considering Beaumont’s oceans of red ink?

Freese Decker should be fired. In addition to his debacle at Beaumont, there has been considerable turnover in the upper ranks of Spectrum, mostly women. Spectrum has also seen considerable turnover of black employees, some of whom have considered filing a class action lawsuit.

This is not a situation one would expect given that Freese Decker said his highest priority is to build a health care system that “celebrates and empowers diversity and inclusion.”

Contact the writer at [email protected]. Confidentiality is assured.

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