As I recently shared, I didn’t set out to spend more than a year reporting on the implosion of Beaumont Health, a healthcare network in southeastern Michigan whose flagship Royal Oak hospital in suburban Detroit once ranked among the best in the U.S. My intent was to bang out a story about how Henry Ford Hospital was paying its nurses considerably more in hazard pay for working during the pandemic. The story was a favor for my friend who owns Deadline Detroit, an independent online publication.
Beaumont’s response to a report by a local television station about the closing of a hospital in a city called Wayne at the height of the pandemic tipped me off that something was very much amiss at the healthcare company. Mark Geary, the company’s PR person, publicly discredited the report, arguing the hospital was merely “paused,” not closed. Beaumont Wayne caters to a population heavily comprised of economically disadvantaged persons, many who lack insurance.
Had Geary not trashed the reporter’s work and simply said the Wayne closure was temporary, I likely would have moved on. Although “pause” is a PR spin word that’s become quite common, it was the first time I heard it. In the more than three decades I worked in journalism and public relations, I’ve learned to become immediately suspicious of managements that employ spinmeisters to do their bidding and shape their messages. I always cautioned clients that PR spin rarely works and often compounds a bad situation. That view cost me a lot of potential clients, but allowed me to only represent companies and individuals with integrity who didn’t regard me as a liar for hire.
My instincts about Beaumont and its management proved correct. Beaumont’s flagship Royal Oak hospital subsequently imploded. After the hospital awarded a controversial outsourcing company a contract to oversee anesthesia services, more than half its fellowship trained anesthesiologists resigned, as did about 50 nurse anesthetists. That prompted more than a dozen prominent surgeons to quit. Dozens of Royal Oak nurses, whose organizing efforts were derailed by union busting goons the hospital spent nearly $2 million to retain, also left the hospital.
Beaumont’s orthopedic surgeons, ranked by U.S. News as the 11th best team in the country, moved their lucrative joint replacement procedures to area ambulatory centers. Within three weeks of the anesthesia outsourcing company taking over, a Beaumont Royal Oak patient died from intubation complications undergoing a routine colonoscopy and another landed in the ICU because of a pain medication overdose.
As Beaumont’s implosion unfolded, the company’s CEO John Fox and Geary tried to spin their way through. Fox’s penchant for saying things that were deceiving or unfounded prompted me to label him the “Donald Trump of Healthcare.” A representative compilation of Fox’s and Geary’s spin can be found here.
Beaumont announced this week that it had signed a letter of intent to merge with Spectrum Health, a Grand Rapids-based hospital network focused on the western side of Michigan. My familiarity with Spectrum was so minimal that when a source tipped me off that Beaumont was in merger talks with the company, my initial response was, “I can’t believe Fox is selling Beaumont to a cable company.” Upon being set straight, I scrambled to learn as much I could about Spectrum Health before cranking out a story for Deadline Detroit on a very tight deadline.
Although Spectrum’s hospitals aren’t of the caliber of University of Michigan’s teaching hospital or even of Beaumont Royal Oak before Fox took over, it has a reputation of delivering competent health care. I found only major controversy, but it was a doozey: A local television station report about OBGYN residents posting photos of themselves on social media holding surgically removed organ and tissue material and playing a game they likened to the “Price is Right.” Obviously, screening residents isn’t one of Spectrum’s strong suits. (The report is worth watching if only to see the reporter’s look of disbelief about what she’s revealing.)
Spectrum’s CEO is Tina Freese Decker, who joined the hospital network in 2002 as an administrative fellow, a program designed to train master’s level graduates on the fine points of running a healthcare facility. Freese Decker held various strategic and operational roles before being named to the top job in 2018. Freese Decker is blessed with the telegenic good looks the media loves, and if she ever tires of being a hospital CEO in real life, she could easily be cast to play one on TV.
Freese Decker’s bio states that her highest priority is “building a health system that celebrates and reinforces diversity and inclusion for employees, patients, families and members.” These are very admirable goals, and the sense I got from reading up on Freese Decker’s carefully cultivated public image is that Spectrum employees walk through the halls singing “We are the World,” and Kumbaya while going about their day.
But the news release that Spectrum jointly issued with Beaumont announcing they’ve become engaged and are looking to marry after getting to know each other a bit better tells a different story about Freese Decker. Admittedly, it was a joint release so Beaumont’s spinmeisters likely had some influence, maybe unduly so because if Beaumont’s Fox can’t pull off the deal, he’s likely out of a job because virtually his entire management team has quit.
Still, Freese Decker no doubt signed off on the release, and given that she’s been designated to lead the merged businesses she had the final say. Freese Decker therefore owns the release’s entire content. For all Freese Decker’s saccharine declarations, she’s comfortable having her name attached to announcements containing lies and deceptions.
Among the whoppers in the release is the claim that combining Spectrum and Beaumont will “improve efficiency and deliver affordable, high-quality care.” The evidence is overwhelming that when hospitals merge, patient care costs rise, often substantially, while the patient care quality declines.
One need to only look to California, where Sutter Health achieved market dominance in the northern part of the state and then was charged with illegally driving up prices and stifling competition. Sutter in 2019 settled a landmark antitrust case brought by California’s attorney general for $575 million. I can assure you that Sutter made considerably more from its allegedly illicit activities. That’s how U.S. hospital companies roll these days.
Notably, on the day Spectrum and Beaumont issued their release, Bloomberg published an editorial warning about the “worrisome trend” of hospital mergers and how they are driving up healthcare costs.
Spectrum sponsors its own health plan and the joint Spectrum/Beaumont release claims the merger will allow “for the development of and investment in innovative solutions that improve health care and coverage for all Michiganders.” In fact, thanks to the market dominance of Michigan Blue Cross Blue Shield, Michiganders already benefit from the lowest hospital prices in the country.
The insurance business is among the most profitable sectors in healthcare, but as every American fortunate to have some medical coverage knows, the focus is on profits, not patient care. Hospital plans are designed to incentivize doctors to avoid ordering expensive procedures to reduce payouts. Spectrum’s goal is to capture as much market share as possible and then use that power to reduce what it pays doctors to cover their services. That’s why the joint release pays lip service to listening to physicians. Spectrum must first play nice with them to get them to accept the hospital’s insurance and gain enough market share so they can screw them down the road.
The joint release dutifully lists “improving health and health equity” as the first of Spectrum’s and Beaumont’s “shared goals.” John Fox talking about a commitment to “health equity” has as much credibility as Donald Trump talking about the importance of presidential candidates disclosing their tax returns. In addition to temporarily closing Beaumont Wayne at the height of the pandemic, Fox starved the hospital of resources. It is well known that he’d like to sell it, but there are possibly some provisions in place preventing him. Serving the poor and the indigent isn’t very profitable.
The release quotes Fox as saying, “We also have deep relationships in our communities that are built upon providing excellent care and service.” Really? John Fox’s primary homes are in Atlanta and North Carolina; his COO, Carolyn Wilson, commutes from her home in Grand Rapids; and his chief nursing officer and chief counsel commute from Atlanta.
Regarding the community’s perception of Beaumont’s care, a doctor who underwent an endoscopy at Beaumont Royal Oak publicly warned to “avoid Beaumont like the plague.” The hospital is being sued by a local upscale grocer for “fraud” and “false promises,” and the president of that company is on record as saying COO Wilson “is a horrible person to do business with – there’s no good faith.”
The joint release is especially dishonest for what’s missing. Beaumont, supposedly a “nonprofit,” has a $3.5 billion reserve, and that money belongs to the residents of southeastern Michigan. The release makes no mention of the tentative terms of the deal, so area residents have no clue what they will be getting in return for giving up that tidy sum of cash. It’s very possible they will be getting nothing.
Also missing from the release is any implied mention of trying to restore Beaumont to its former glory, a challenging task given that it would be an acknowledgment of the damage to the hospital network that Fox has caused. The release is all rhetoric, entirely soulless because it’s written in PRspeak.
A year ago, Fox tried to pawn off Beaumont to a Chicago-based outfit called Advocate Aurora in a deal that would have allowed Advocate to take over Beaumont and its then $2.5 billion reserve without forking out a penny. The terms were so obscenely favorable to Advocate that fierce opposition from Beaumont’s donors nixed the deal.
There is nothing in Fox’s background or record to suggest he has an iota of concern for the residents of southeastern Michigan. A more likely motivation for merging with Spectrum is that he has a change of control clause in his contract that will shower him with millions if the company takes over Beaumont. Controlling a $3.5 billion kitty and an assured golden parachute, he literally is a Fox guarding a healthcare henhouse.
Freese Decker can wax on all she wants about inclusiveness, health equity, and all the other message points that make her a media darling. Actions speak louder than words: Spectrum merging with Beaumont won’t be good for the communities both hospitals serve. The ultimate beneficiary of the deal is Freese Decker, who will garner riches beyond her wildest dreams and join the fast-growing pantheon of hospital executives who care more about their personal enrichment than the health and well-being of everyday Americans.