Starkman: Bailing Out at Beaumont -- 2 More Top Execs Bid Bye-Bye to CEO John Fox

May 26, 2021, 10:03 PM

The columnist, a Los Angeles freelancer, is a former Detroit News business reporter who blogs at Starkman Approved.

By Eric Starkman

Beaumont CEO John Fox

Hey, Beaumont Health CEO John Fox: You’re an accountant, I’m a writer, and I’m going to explain your current situation in language so simple that even the numerical side of your brain can easily process and understand.

Most of the people working at Michigan’s biggest hospital network just aren’t into you.

They never have been.

Your first clue should have come in December 2019 when Marc Sakwa, a nationally renowned cardiac surgeon who was beloved by the medical staff, his patients, and the prestigious donors he attracted, resigned and moved to southern California. Unlike yourself, Sakwa was born in the Detroit area and had strong ties to southeastern Michigan. While you maintain that Sakwa left because of revenue sharing issues, multiple people have told me he left because he was disgusted with your leadership.

He was not alone. A survey last year revealed the majority of Beaumont doctors had no faith in your leadership or that of COO Carolyn Wilson and Chief Medical Officer David Wood Jr. The disdain was particularly strong at Beaumont Royal Oak, a nationally respected hospital until you showed up.

Wilson’s misguided idea to outsource anesthesia to a controversial out-of-state company precipitated the exodus of more than a dozen prominent surgeons, half of the hospital’s fellowship-trained anesthesiologists, about 50 nurse anesthetists, and countless nurses.

Now even your hand-picked executives are rushing for the exits.

Billboard that was mocked

Dawn Geisert, Beaumont’s chief compliance officer, gave notice a few weeks ago and her last day is Thursday. Denise Waters, vice president of revenue cycle and the executive responsible for keeping Beaumont flush with cash, has also given notice. The departures follow the resignation of CFO John Kerndl, who left in March. Mark Bohen, Beaumont’s chief marketing officer, bolted last September. His job remains unfilled, which perhaps explains the horrific billboard Beaumont put up on Woodward assuring patients the hospital was safe.

You can't run a safe and efficient hospital system when your top lieutenants are bailing left and right. It's not only bad for morale, but potentially dangerous for patients. 

Dawn Geisert

Insiders tell me that Geisert is good people. That was the impression I got when your spinmeister Mark Geary was compelled to let me know that Geisert hadn’t been told of a text message from senior surgical director Rebecca Moody looking to sabotage written concerns from nurse anesthetists about chronic issues with Beaumont’s Alaris drug infusion pumps. I suspect Geisert wanted it publicly known that she wasn’t among the Beaumont executives willing to turn a blind eye to Moody’s behavior. How telling it's Geisert that’s leaving and Moody remains in her job.

Geisert’s LinkedIn bio suggests she’s Pure Michigan, whereas you and most of your remaining top lieutenants are from out of state, where you all maintain your primary homes.

Moody’s text message speaks volumes about Beaumont’s commitment to patient safety, particularly in the wake of a colonoscopy patient dying from intubation complications and another landing in the ICU because of a pain medication overdose within three weeks of Wilson’s anesthesia outsourcing firm taking over at Beaumont Royal Oak.

Despite these incidents, Wilson told Crain’s Detroit Business she was pleased with the hospital’s transition to NorthStar Anesthesia. Losing a patient and nearly losing another – no biggie to your deputy Wilson, who has a nursing degree.

Credit for Spin

John, I give you credit for the spin you put on your memo announcing Geisert departure, arguing that taking the chief compliance job at Trinity Health is a big step up because the Livonia-based company runs 92 hospitals in 22 states -- a far bigger operation than Beaumont's eight-hospital network in southeastern Michigan. That’s true, but the job comes with other major benefits.

One of them is that Geisert won’t have to deal with any management attempts to cover up issues with Alaris drug pumps, which have been subject to more than a dozen FDA recalls in the past 15 months, some dealing with death and injury. That’s because Trinity heeded the FDA’s warnings and removed all its Alaris pumps.

Geisert will still be able to keep in touch with some of her Beaumont surgical and other medical colleagues. Trinity owns St. Joseph Mercy Oakland in Pontiac, where Beaumont’s best and most conscientious surgeons are increasingly choosing to perform their procedures.

I thought perhaps Moody’s text message prompted Geisert to leave, but one insider said that’s doubtful. “We’re surprised she stayed as long as she did,” the insider said.

John Kerndl and Denise Waters

Waters’ departure should have come as no surprise. Waters and Kerndl had a very close working relationship, and I presciently noted her likely departure when Kerndl resigned. Waters won’t be missed by her staff, many who still resent her for making them come into the office in the midst of the pandemic.

“We have been waiting for this day!!! :),” said one of Waters’ subordinates after her resignation announcement was sent out.

Underscoring the sad state of Beaumont’s executive leadership, Waters’ resignation was announced by Diane Roth, interim executive vice president and chief financial officer, who disclosed that Waters will be replaced by an executive being brought in on an interim basis.

Interim executives announcing the appointment of interim executives. How pathetic.

Competent Oversight?

Beaumont Chair John Lewis

Next Tuesday, John Lewis steps down as board chair. That’s a big blow to you John, as Lewis is one of the few people who seems to appreciate the work you’ve done.

I’m guessing that Julie Fream, Lewis’ replacement, won’t make any waves given that she served as chair of the audit committee and she has no auditing or accounting background. That screams loud and clear that Fream and her colleagues aren’t committed to providing diligent and competent oversight. 

John, it’s time you did some soul-searching and owned up to the harm you’ve caused Beaumont, its employees, and the residents of southeastern Michigan. When you arrived in 2015, Beaumont Royal Oak was among the best regional hospitals in the country. Now it’s just a glorified community hospital, with a miserable workforce and only a four-star rating from the Centers of Medicare and Medicaid Services.

Virtually all of your top lieutenants have left. I’m not a betting man, but I’d take a wager that in short order Aaron Gillingham, your HR head, will be giving his notice. Along with Kerndl and Waters, he, too, sold his Detroit area house last September. And you sold your Bloomfield Hills estate in March.

By any measure, Carolyn Wilson, David Wood, and you are colossal failures. Do the right thing: resign and rejoin your wife in Atlanta. You’ve always had Gov. Gretchen Whitmer’s ear and word around Lansing is she can get you a great deal on a private jet to take you back to Georgia.

Admittedly, I have a vested interest in your departure. I’ve gotten to know legions of Beaumont employees and they’ve invited me to the celebration party that’s planned when you ride off into the Georgia sunset. I’m always up for a great party, and when you resign or are forced out the door, I’m confident that most of Beaumont’s more than 30,000 employees will be partying like there’s no tomorrow.

Reach Eric Starkman at: Beaumont employees and vendors are encouraged to reach out, with confidentiality assured.

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