Beaumont, Advocate Aurora end merger discussions after controversy

Beaumont, Advocate Aurora end merger discussions after controversy

Southfield-based Beaumont Health has ended long-running merger discussions with Illinois-based Advocate Aurora Health that were marked by controversy and opposition from many Beaumont staffers.
Beaumont did not give a specific reason for the ending of talks, which had been put on hold in August while eight-hospital Beaumont tried to work out issues with doctors, a growing number of community supporters and several state and federal legislators.
Beaumont and Advocate signed a nonbinding letter of intent in late June and had hoped to complete a final agreement later this year. Any deal would have required a vote by the 16-member board of directors and sign off by Michigan Attorney General Dana Nessel.
“We continue to have a very high regard for Advocate Aurora Health,” said John Fox, Beaumont’s president and CEO, in a statement. “But, at this time, we want to focus on our local market priorities and the physicians, nurses and staff who provide compassionate, extraordinary care every day.”
While discussions began in late 2019, they were put on hold earlier this year as COVID-19 accelerated across the Midwest.
“We have great respect for Beaumont Health and we continue to believe scale will play a critical role in advancing quality, accelerating transformation and reducing cost in the health care world of tomorrow,” said Jim Skogsbergh, president and CEO of 26-hospital Advocate Aurora, in a statement.
The merger would have created a 34-hospital, three-state regional system with $17 billion in annual revenue, more than 100,000 employees, 2,500 employed doctors, 650 outpatient sites and a medical school partnership, Crain’s has reported. It would become the nation’s seventh-largest not-for-profit health system by revenue, behind Livonia-based Trinity Health.
But over the past three months, physicians, nurses and donors have expressed dissatisfaction with Fox, COO Carolyn Wilson and Chief Medical Officer David Wood over a number of management decisions they say has led to low morale, inadequate staffing, lack of supplies, changes in anesthesia services and departures of top doctors and nurses.
In separate surveys, 76 percent of 1,555 physicians said they have no confidence in corporate management and 70 percent expressed opposition to the merger with Advocate. An even greater percentage of nurses expressed lack of confidence in management (96 percent) and opposition to the merger (87 percent). Nearly 700 nurses took the survey.
Donors late last month sent a letter urging the Beaumont board to immediately address and fully resolve problems related to physician and nurse dissatisfaction and the pending merger.
Sources have told Crain’s the staffers and donors appear to be mostly concerned with a decrease in the quality of the medical staff.
In May, Beaumont abruptly Beaumont Health called off a merger with four-hospital Summa Health, an Akron, Ohio-based system. The systems had already received all state and federal regulatory approvals.
Beaumont officials said the delay was to allow both hospital systems to navigate the coronavirus pandemic and its financial fallout, but Summa executives said they were surprised by the announcement.
This is a breaking news story and will be updated.

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