Deadline Detroit | Starkman: Spectrum taps Chicago Bank HR chief to stem massive Beaumont nurse resignations expected in January

The writer, Los Angeles freelancer and former Detroit News business reporter blogs at Starkman Approved.

By Eric Starkman

Tracie Morris

Grand Rapids-based BHSH, the corporate entity for the combined hospital operations of Beaumont Health and Spectrum Health, announced that Tracie Morris, former chief human resources officer at BMO Financial Group, has been named “chief human resources officer” – a position formerly known as Head of Human Resources.

Morris, who trade publication American Banker named one of the most influential women in American banking last year, does not appear to have a background in the health field. According to her LinkedIn profile, before joining Chicago-based BMO Financial, she worked in human resources at various utility companies and for-profit DeVry Education Group.

Morris faces an HR challenge of unimaginable proportions, arguably among the biggest in the healthcare industry.

BHSH is by far Michigan’s largest hospital system, with 22 hospitals, more than 300 ambulatory care facilities, and 64,000 employees. HR is the most critical job in the industry, especially for Spectrum, which wrapped up its acquisition of struggling Beaumont Health in February.

Beaumont has seen a reckless exodus of nurses that is expected to lead to a stampede in January. That’s because Beaumont nurses were offered retention bonuses more than a year ago if they stayed in hospital until December of this year. Once retention bonuses are paid, nurses will have little incentive to stay.

A source told me that Beaumont pays nurses less than any hospital system in Southeast Michigan. In years past, the hospital system could get away with paying lower salaries because there was a certain prestige in working at Beaumont, a once renowned regional hospital until former CEO John Fox le detonate. Beaumont’s health benefits are said to be better than those of Henry Ford Health, but that could change if Spectrum chooses to replace or reduce the plan.

Even with the retention bonuses, Beaumont nurses have been bailed out at alarming rates. BHSH recently reported that Beaumont had racked up nearly $100 million in losses since February, which CFO Matthew Cox blamed on a “significant expense” for higher personnel costs, including increased fees for nurse recruitment agencies. Highlighting Spectrum’s error in judgment about the seriousness of Beaumont’s situation when it acquired the system, the company had only projected $57 million in losses.

Henry Ford’s Stellar HR

The American hospital industry is notoriously bad at human resource management, so hiring an executive from another industry might prove to be a plus. Henry Ford Health is known for its quality human resources management, and as far as I can tell, Nina Ramsey, Senior Vice President and Chief Resource Officer, oversees the function. Before joining Henry Ford in 2017, Ramsey spent nearly 30 years at Troy-based Kelly Services, where she was director of human resources for more than half of her tenure.

Ramsey’s biography suggests that she is pure Michigan, as she has an undergraduate degree from Oakland University and a graduate degree from Wayne State. So when she joined Henry Ford, she knew the area when she changed careers. Moreover, there was no shortage of nursing staff when Ramsey joined Henry Ford.

Henry Ford spokesman David Olejarz did not respond to a request for comment.

Nothing in Morris’ biography suggests she has any Michigan ties or work experience, which is notable given BHSH’s tagline: “For Michigan, by Michigan.” Dr. Benjamin Schwartz, whom Spectrum recently appointed to lead the struggling Beaumont hospital network, hails from suburban New York.

Spectrum’s press release did not say whether Morris would move to Grand Rapids or Southfield or possibly continue to live in Chicago. Former Beaumont COO Carolyn Wilson retained her primary residence in Grand Rapids, although she also retained a condo in Franklin to live in during the week.

No transparency

Beaumont spokesperson Mark Geary

Spectrum and Beaumont spokespersons Beth Cranson and Mark Geary ignored an email seeking comment.

Cranson and Geary reflect Spectrum’s notorious lack of transparency. Spectrum requires departing employees to sign stringent nondisclosure agreements as a condition of any severance package, allowing the company to keep embarrassing issues or wrongdoing a secret. Geary is a legacy of former Beaumont CEO John Fox, who, as I’ve written before, lacked credibility.

Despite her lack of healthcare experience, Spectrum CEO Tina Freese Decker is confident Morris can get started. “Tracie has the vision and experience to make an immediate and positive impact on our teams, our organization and our communities,” Spectrum CEO Tina Freese Decker said in a press release.

It better be, as an acute shortage of nurses nationwide seems to be getting worse. It has become much more lucrative for nurses to quit their jobs and work for employment agencies offering much better pay.

Even Henry Ford, despite his quality HR management during the pandemic, has been impacted. The hospital system has been forced to step up recruitment efforts in Windsor, where a large percentage of its nursing staff live. Beaumont was also trying to recruit from Windsor, as well as overseas.

pay better

According to a nursing source, Detroit-area nurses earn about $42 an hour or less, on average. Placement agencies offer salaries of up to $110 per hour and, in some cases, rent and relocation assistance.

The nursing staffing situation has become so dire in Beaumont that even managers have to work shifts on the floor.

In my opinion, having so many temporary nurses and other health professionals is a safety risk. A year ago, last January, a patient at Beaumont Royal Oak died of complications from anesthesia while undergoing a routine colonoscopy. The nurse anesthetist who administered the anesthesia was visiting from Beaumont Dearborn. The anesthetist supervising her was from the Detroit Medical Center.

Notably, the endoscopy suite at Beaumont Royal Oak, where the colonoscopy death occurred, experienced significant nursing staff turnover and had to rely heavily on traveling nurses.

The approach of the colder months could prompt nurses to move to Florida to escape the rigors of a Michigan winter, at least temporarily. Ford CEO Jim Farley has said he plans to lay off 8,000 employees, most of them likely in the Detroit area. There is no doubt that the wives of some of the laid off Ford workers are employed as nurses, which could give further impetus to relocations.

Spectrum rescue?

Tina Freese Decker

Another example of Spectrum’s lack of transparency, the terms of the hospital system’s takeover of Beaumont were not made public. It’s likely that Freese Decker paid nothing to acquire Beaumont and his $3 billion+ stash, other than giving the former Fox CEO a nice golden parachute to disappear as soon as the deal closes.

Freese Decker was no doubt relying on Beaumont’s reserve to cover expected losses, but his miscalculation of the magnitude of those losses could ultimately jeopardize Spectrum’s independence. If Beaumont continues to suffer massive losses for an extended period, the BHSH business may need to be rescued by a larger, out-of-state hospital system with the management talent and resources to turn around a healthcare system. in trouble.

Michael Freed, the former Spectrum CFO who publicly warned that the Beaumont acquisition could result in “massive financial loss”, noted on his LinkedIn page a few months ago that Spectrum could be at risk of being acquired and run by an out-of-state company, much like Chicago’s Advocate and Wisconsin’s Aurora hospital systems will be if regulators approve a proposed acquisition by Charlotte’s Atrium Health. Freed made the takeover comment before it was publicly known how much of a drain Beaumont was proving to be on Spectrum.

Diversity commitment

By hiring Morris, who is black, Freese Decker is fulfilling her desire to ensure diversity, which she says is her highest priority.

Carlos Cubia

In June, Spectrum announced the hiring of Carlos Cubia as director of inclusion, equity, diversity and sustainability, and offered this rambling description of its mission: to inspire and define “the transformational and innovative system-wide inclusion, equity (including health equity), diversity and sustainability strategies to drive the organization toward its health transformation goals for the communities it serves serving, improving health and health equity, and promoting a culture of belonging.

Cubia previously worked at Walgreens Boots Alliance, also based in Chicago. Spectrum did not reveal where Cubia will be based or who he will report to.

A year ago, a group of Black Spectrum employees met with an attorney to explore the possibility of a class action lawsuit alleging systemic racism. Ovell Barbee, former Spectrum diversity manager who in April 2021 was named one of the nation’s top diversity leaders, resigned last October to join Indiana University Health as chief human resources officer. . Barbee was a lifelong Michigander and well-liked by black Spectrum employees.

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