Beaumont board voices support for merger with Advocate Aurora as physicians criticize leadership

Southfield, Mich.-based Beaumont Health’s board is voicing support for the health system’s proposed merger with Advocate Aurora Health, while some physicians are raising concerns about the deal. 

Beaumont and Advocate Aurora, which has dual headquarters in Downers Grove, Ill., and Milwaukee, announced June 17 that they signed a nonbinding letter of intent to create a 36-hospital health system spanning Michigan, Wisconsin and Illinois. The majority of Beaumont’s 16-member board issued a letter to employees July 21 that said they support the proposed transaction, according to Detroit Free Press. 

The merger would result in $1.1 billion in investments in Beaumont’s facilities, technology and clinical programs over the next three years and would allow the system to maintain a 4 percent net-positive margin, the letter said, according to Detroit Free Press

Though the board supports the proposed merger, some physicians are concerned about the deal and are circulating a no-confidence petition on Beaumont’s CEO and CMO. 

The petition criticizes the potential merger and calls for the removal of President and CEO John Fox and Executive Vice President and CMO David Wood Jr., MD. A cover letter to the petition accuses Beaumont’s leaders of focusing on the system’s “financial status” at the expense of “the cost on our community,” according to Detroit Free Press. The no-confidence petition claims the proposed merger would remove local control of Beaumont’s hospitals, according to Crain’s Detroit Business

In its letter to employees, the board emphasized that it is not “selling” Beaumont. 

“Beaumont Health will continue to be a Michigan corporation with its own board of directors, leadership team and regional headquarters,” the board’s letter said, according to Detroit Free Press. “Stating anything other than this is simply factually wrong.” 

Mr. Fox and Dr. Wood told Crain’s Detroit Business that they’re taking physicians’ concerns seriously. Mr. Fox has had several virtual meetings with physicians in recent weeks to answer their questions and discuss the potential merger, and he and Dr. Wood are meeting with chairs of clinical departments and medical staff presidents over the next week to better understand the physicians’ specific concerns.

The talks are occurring as Michigan Attorney General Dana Nessel is beginning her review of the transaction. The attorney general’s office is responsible for protecting charitable assets, and Beaumont wants to remain a nonprofit organization after it merges with Advocate Aurora, according to The Detroit News

“We welcome this part of the standard business review process and we are providing the attorney general with all necessary information,” a Beaumont spokesperson told The Detroit News

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