Deadline Detroit | Starkman: Layoffs. Disgruntled Staff. So What? Beaumont’s John

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

By Eric Starkman

CEO John Fox

While Beaumont Health’s medical and custodial staff risked their lives and hundreds of hospital employees lost their jobs, CEO John Fox and his top managers appear poised to rake in big bonuses for leveraging the 2020 pandemic into a very good year financially for Michigan’s biggest hospital network.

The results make clear why Fox commands the loyalty of John Lewis, the retired Comerica banker who serves as Beaumont’s chairman and whose commands the company’s directors obediently follow. Beaumont in 2020 not only came within a smidgen of its ambitious four-percent operating profit margin, but the hospital company increased its cash and investment reserves by 54 percent to $3.5 billion.

No, that’s not a couple of numerical typos. Beaumont, a supposed nonprofit, finished the year with $3.5 billion socked away, up from $2.3 billion at the end of 2019.

Having a ruthless accountant run a hospital network has its benefits!

Beaumont’s release disclosing its 2020 financials was posted on the company’s website last Monday, but I only just stumbled on it. As best I can tell, the Detroit News was the only major publication to report on Beaumont’s financials, but it downplayed the company’s embarrassment of pandemic riches.

Financial Crisis Looms?

To fully appreciate Fox’s financial accomplishment, one needs to read this op-ed he penned for the Detroit Free Press in March, warning that “an immediate healthcare financial crisis is looming.” Fox last April was the Chicken Little of the American hospital industry, telling the Washington Post and others that the $100 billion Congress allocated for hospitals and health-care providers in its $2 trillion coronavirus rescue bill was insufficient.

COO Carolyn Wilson

Fox’s 2020 financial triumph came at the expense of Beaumont’s once vaunted reputation as one of the top 50 hospitals in America. The hospital network last year lost more than a dozen prominent surgeons, half of its fellowship trained anesthesiologists, about 50 experienced Certified Registered Nurse Anesthetists and countless nurses, all of whom were fed up with the penny-pinching ways of Fox, COO Carolyn Wilson, and CFO John Kerndl. Beaumont is widely regarded in hospital circles as a miserable place to work.

Fox also last year laid off 2,475 workers and eliminated 450 jobs. The company claims its recalled all the laid off employees, but multiple sources have contacted me to say that isn’t true. At the height of the pandemic in Michigan, Beaumont temporarily closed its hospital in Wayne, which far and away serves the heaviest mix of Medicaid, indigent, and uninsured patients of Beaumont’s eight hospitals.

A survey last year revealed the majority of Beaumont doctors have no faith or trust in Fox and his management team. But chairman Lewis is a numbers guy, and Fox in 2020 again delivered the financial goods, albeit with oodles of handouts from the Trump Administration and Congress.

This is the time of year when Beaumont’s board determines bonuses, and it seems likely that Fox, Wilson, Kerndl, and other top managers will be rewarded handsomely for their financial accomplishments. Fox in April claimed he took a 70-percent pay cut but wouldn’t disclose his base salary. He told the Free Press his salary was restored in August.

Mark Geary

I ran my hefty bonus speculation by Beaumont spokesman Mark Geary, but I can only surmise he was speechless and didn’t respond. Geary in April issued a statement saying that “given the expected financial performance of the organization, incentive plans for our CEO and other executives are projected to not have any payout due to the financial losses associated with the pandemic.”

Geary is the Bard of PRspeak. Lacing his…