Former Beaumont director wants CEO, top execs fired, merger delayed.

Mark Shaevsky, who served on the Beaumont board for 17 years until 2014, told Crain’s he has been frustrated the past several months that a majority of the Beaumont board appears to support the proposed merger with 28-hospital Advocate Aurora Health, a nonprofit health system with offices in Chicago and Milwaukee.

He also said he doesn’t believe the board has sufficiently addressed patient safety concerns expressed by doctors and nurses.

“I am very, very concerned the proposed acquisition, and I call it an acquisition, is very, very detrimental to the community,” Shaevsky said Thursday. “We have a significant community asset and if the merger is completed it will not really be controlled by the community.”

Shaevsky said Southfield-based Beaumont Health could continue to exist and thrive without being part of a larger system. “I don’t think bigger is better. I don’t see where the benefit would be to Beaumont,” he said.

In his Sept. 4 letter to Nessel — received by her office on Sept. 8 — Shaevsky detailed why he believes the proposed merger makes no sense.

“Beaumont’s annual revenues are nearly $5 billion,” wrote Shaevsky, an attorney who now heads Mark Shaevsky & Associates, LLC – Management Advisors in Farmington Hills. “If sold, the proceeds of $5 billion would go into a community foundation to support the health needs of the community. If the $5 billion would produce annual income of 5 percent, that would mean $250 million would be available for the betterment of our citizens every year indefinitely — and still have the $5 billion foundation. So, why would the citizens of Michigan transfer 100% ownership of a $5 billion community asset to another institution in return for promises of expenditures of slightly over $1 billion and a minority interest in a combined hospital system?”

Shaevsky told Crain’s he is not in favor of Beaumont selling to a for-profit company like Tenet Healthcare or HCA Healthcare, where the sale proceeds would go to create a community foundation. He said he used the example to illustrate how a nonprofit like Advocate Aurora would assume the assets and leave very limited reserved powers for local control.

“You have a valuable asset built up over the years. It is tax-exempt and belongs to the community,” Shaevsky said.

Fox has said that Advocate Aurora will make a $1.1 billion investment in Beaumont for capital, equipment and clinical program improvements over the next three years, if the merger is approved.

Shaevsky wrote the capital promise comes “without guarantees” and could be disregarded or delayed.

Advocate Aurora CEO Jim Skogsbergh has told Crain’s the system is committed to the funding, but that it could take more than three years to complete because of the COVID-19 pandemic and projected system losses of $500 million this year.

“The reality is Beaumont has the financial resources to pay for all the projects allegedly promised by Advocate,” Shaevsky wrote, adding that Beaumont has more than $2 billion in cash reserves and a top credit rating for tax-exempt bonds.

Contacted by Crain’s, Nessel’s office said she has received numerous letters about the Beaumont-Advocate proposed merger and that a preliminary review is underway. Nessel must approve the merger, a process that could take months.

Mark Geary, a Beaumont spokesman, said the system has not seen Shaevsky’s letter and could not comment at this time.

Shaevsky said Nessel’s office acknowledged his letter. He said he has no confidence in the board taking action and felt Nessel might intervene on behalf of the community.