This columnist, a Los Angeles freelancer, is a former Detroit News business reporter who blogs at Starkman Approved.
By Eric Starkman
Beaumont Royal Oak’s once-bustling Endoscopy Suite, where a patient died undergoing a routine colonoscopy in January, has suffered a rash of nurse resignations and can barely operate at 50-percent capacity.
Endoscopy, a range of procedures used to diagnose and treat conditions of the esophagus, stomach and portions of the intestine, is one of a hospital’s most lucrative areas. The procedures are typically safe and high-volume, and hospitals tack on a hefty “facilities fee” that can also trigger gastroenterological issues.
Beaumont’s Endoscopy Suite, comprised of 10 procedure rooms, requires about 30 nurses trained in endoscopy to remain fully functional. The specialized nursing staff is down to nine, and Beaumont on its best days can only staff five rooms. As a result, the hospital’s gastroenterologists often can’t schedule their procedures, even critical ones.
“They treat their physicians like crap,” said a source, who didn’t intend the comment as a pun.
The source said the room shortage is compounded because Laith Jamil, Beaumont Royal Oak’s head of Endoscopy and Gastroenterology, often keeps one of the rooms for his own procedures, which frequently extend into the evening and require nurses to work beyond their normal workday shifts.
Beaumont is a Level 1 Trauma Center, meaning it is supposedly capable of treating every type of injury on an emergency basis. The source said the Endoscopy Suite is so short-staffed that handling an emergency could be problematic.
“They haven’t had a disaster yet, but they are at serious risk of not being able to handle an emergency,” the source said.
Beaumont spokesman Mark Geary ignored a request for comment.
In January, a healthy patient died from intubation complications during a colonoscopy at Beaumont’s Endoscopy Suite. The tragedy happened within three weeks of NorthStar Anesthesia, an outsourcing company, taking over anesthesiology at Royal Oak. The co-heads of Beaumont’s cardiology department last year wrote to Beaumont’s then chair John Lewis that they had “serious concerns” about NorthStar's capabilities, but their warnings weren’t heeded.
The nurse anesthetist and the anesthesiologist involved in the colonoscopy tragedy were brought in by NorthStar from other area hospitals on a temporary basis. After the tragedy, Beaumont mandated that only anesthesiologists and nurse anesthetists who previously worked at Beaumont before NorthStar taking over could work in the Endoscopy Suite. That restriction has been lifted.
Beaumont announced in June that it signed an agreement to merge with Spectrum Health of Grand Rapids. The deal, the terms of which still haven’t been announced, was fashioned as a merger of equals, but Spectrum is effectively taking over Beaumont, whose flagship Royal Oak is crippled almost beyond recognition since Beaumont CEO John Fox arrived in the spring of 2016. Fox, who already has received more than $20 million in compensation since he arrived, possibly could receive tens of millions more as part of a golden parachute if he can successfully unload Beaumont to Spectrum.
Beaumont went into a tailspin last year after COO Carolyn Wilson awarded NorthStar its anesthesiology contract. Approximately half of Beaumont Royal Oak’s fellowship trained anesthesiologists resigned rather than accept lucrative signing bonuses to join NorthStar, as did about 50 nurse anesthetists. That, in turn, triggered the exodus of more than a dozen surgeons and other specialists.
Beaumont’s orthopedic surgeons, ranked among the best in the country, moved a sizeable portion of their procedures to rival hospitals and area outpatient facilities.
As Deadline Detroit reported earlier this month, Beaumont’s cardiac surgery department has been ranked by the Society of Thoracic Surgeons among the lowest five percent in the country in terms of patient safety. The department for many years was ranked in the top tier but went into decline after two renowned surgeons resigned in the fall of 2019 because of dissatisfaction with Fox’s leadership and other issues.
Underscoring how dated the data U.S. News’ hospital rankings are based on, the publication’s recently released survey ranked Beaumont Royal Oak 19th best in the nation for Gastroenterology and GI Surgery and Cardiology and Heart Surgery.
More recently, two highly regarded breast surgeons gave notice, and a respected interventional radiologist departed. The head of Physical Medicine and Rehabilitation at Royal Oak was forced to resign after warning Beaumont Royal Oak’s chief medical officer that budget cutbacks were harming patient care.
Beaumont surgeries are frequently delayed or can’t be scheduled because of a shortage of nurses and support staff to sterilize surgical instruments. The situation is so dire that some tissue was recently discovered by a scrub tech on an instrument required for surgery after the patient was already anesthetized.
Deadline Detroit has learned that Beaumont’s board of ostriches, who kept their heads buried in sand while CEO John Fox and COO Carolyn Wilson were destroying Beaumont, has sent out requests for proposals looking for a search firm to find an executive to run Beaumont’s operations post-merger. Fox has said he will leave after Spectrum takes over Beaumont; Wilson is slated to leave next week, and Chief Medical Officer David Wood Jr., who is unpopular with the medical staff, will be gone at the end of September. Most of Fox’s management team resigned months ago.
The RFP says Beaumont is looking for a “Regional President and COO,” indicating that Spectrum really plans to maintain a dual headquarters if the candidate will be the the No. 2 execuive of all the merged operations. Spectrum currently doesn’t have a COO.
The chosen candidate will have one of the toughest jobs in U.S. healthcare. Merging hospital operations and staffs is a formidable task, but the candidate will also have to first stabilize Beaumont. Royal Oak insiders say the flagship hospital’s senior managers aren’t up to snuff but kept their jobs because they are Fox loyalists. Speculation is rife they will get booted after the merger.
Studies show that even when well-run hospitals merge, patient quality declines and prices increase. Michael Freed, Spectrum’s former CFO who also headed Spectrum’s insurance business, has warned that merging Spectrum with Beaumont could result in a “massive financial loss.” Beaumont has a $3.5 billion reserve, so Spectrum will have plenty of cushion if the merged operations go south quickly.
Still, the head of Beaumont’s operations will face increased competition. Henry Ford Hospital in the fall plans to open a facility in downtown Royal Oak offering 20 clinical services, including ambulatory surgery, cardiology, family medicine, integrative medicine, orthopedics, pediatrics, gastroenterology, and women’s health, as well as lab services, a retail pharmacy, and retail eye care services. Word around Beaumont is that Henry Ford treats its nurses like “royalty,” so if by chance HFH needs some with gastroenterology expertise, I know of nine who might welcome coming over.
Dan Loepp, Blue Cross Blue Shield of Michigan’s savvy CEO, might also have something up his sleeve. The company recently acquired Royal Oak-based Triarq Health, which provides management, IT, administrative, and other services to independent physician practices. Several physicians who departed Beaumont went into private practice. If I was looking to do a “bet the farm” merger with another hospital, I wouldn’t do it in Loepp’s backyard, or for that matter within easy driving distance to Michigan Medicine and Cleveland Clinic.
The merger still requires regulatory approval. Michigan Attorney General Dana Nessel, who has shown no interest or understanding of healthcare issues, will no doubt rubber stamp the deal. The FTC also is expected to bless the deal, despite President Biden warning about the perils of hospital mergers.
Crain's Detroit Business on Friday reported that FTC lawyers met with various Michigan business to understand concerns about likely higher prices resulting from the merger. Spectrum says the deal will result in better pricing, but few, if any, people with an understanding of healthcare believe them.
What’s disheartening is that Beaumont’s board will be determining who will run Beaumont’s operations post-merger, and possibly be the No. 2 person at what will become the biggest employer in Michigan. This is the board that approved Fox’s hiring and looked the other way as he ran the hospital network in the ground.
Beaumont chair Julie Fream, whose day job is president of the Original Equipment Suppliers Association, will serve as chair of the merged company.
Fox’s departure will be a welcome development for Michigan. I’d be happy to make myself available to drive him to the airport and make sure he safely boards his flight home to Atlanta.
Reach Eric Starkman at: firstname.lastname@example.org. Beaumont employees and vendors are encouraged to reach out, with confidentiality assured.
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Columns by this writer:
- C-Section Horror at Beaumont – Lawsuit Claims Surgeon Left Sponge in Patient’s Abdomen
- Former Spectrum CFO Trashes Beaumont Merger and Warns of 'Massive Financial Loss'
- Beaumont Health's Merger Partner Reveals its Disingenuous, Deceptive and Disrespectful Nature
- Spectrum Health’s Black Employees Explore Class Action Lawsuit Alleging Systemic Racism
- Beware! Seven Failed Beaumont Directors Will Serve on Board If Spectrum Merger Gets Approval
- Beaumont CEO John Fox’s Final FU to Detroit: Merger with Spectrum Health
- Beaumont Health Chair John Lewis -- Champion of CEO John Fox -- Stepping Down in June
- Beaumont Manager Moved to Sabotage Anesthetists’ Concerns About Critical Drug Pump Shortage
- Beaumont’s John Fox Set to Unload Historic Bloomfield Hills Estate
- Beaumont Nurse Anesthetists at Royal Oak, Troy and Grosse Pointe Vote Overwhelmingly to Unionize
- Beaumont Forces Suspension of Leader of Nurse Anesthetist Union Drive