Health Care Suitors Pitch Fla. Medical Center

Oct. 05--There was no shortage of wooing from three health care suitors this week as they tried to convince local leaders that they were the best choice to lease and operate Munroe Regional Medical Center.

Some of the officials charged with recommending one of the three are already -- albeit tentatively -- eyeing favorites.

Munroe's overseers, the Marion County Hospital District trustees, are looking to potentially lease the 421-bed facility. The public, nonprofit hospital is struggling financially and lacks money to expand and remain competitive.

In November, voters will be asked to approve a one-mill property tax measure that would support the hospital. The tax would generate an estimated $65 million over five years. If the referendum passes, the trustees are expected to forgo any new lease agreement for the foreseeable future.

In the meantime, the trustees are considering outside proposals.

On Tuesday, Duke LifePoint Healthcare, a joint venture between Duke University Health System, Inc. and LifePoint Hospitals, made a two-hour pitch.

That was followed by a two-hour presentation from a partnership between Health Management Associates and Shands HealthCare.

On Wednesday, Community Health Systems rounded out the presentations with a pitch as to why it should be allowed to operate the hospital as part of a 40-year lease proposal.

The presentations were made to the trustee-formed, eight-member Strategic Options Workgroup, which will make recommendations to all of the trustees. Some members of the public also attended.

"I don't think anyone provided a knockout," said Randy Klein, a workgroup member. "I'm like the undecided voter."

Jon Kurtz, who also is the trustee chairman, asked fellow workgroup members to refrain from ranking the applicants or publicly favoring one.

He also warned them not to be too swayed by presentations; rather, he said, they should drill deeper and measure the applicants' compatibility with Munroe.

Kurtz said if Munroe were leased to an outside entity, "we would be one among many (hospitals under corporate authority), but that's OK as long as we have the right partner."

Munroe is owned by the state-sanctioned Marion County Hospital District and is overseen by seven trustees who are appointed by the County Commission. The trustees currently lease the hospital to Munroe Regional Health System Inc., which is overseen by a 13-member board, some of whose members also are district trustees.

Community Health Systems (CHS) is offering $406.7 million to lease Munroe, which includes $150 million for capital improvements. The Tennessee-based company owns or leases 135 hospitals in 29 states, including two in Florida.

Duke LifePoint Healthcare is offering $375 million for a 40-year lease. LifePoint on its own owns or leases more than 50 hospitals in 22 states, including a facility in Palatka.

The Health Management Associates/Shands HealthCare partnership is offering between $440.2 million and $500.2 million. HMA owns or leases 70 hospitals nationwide and has affiliations with 32 hospitals in Florida, including some in the Shands group.

"(Duke LifePoint executives) all used the word 'we' (when discussing its hospitals)," said workgroup member Dr. Harvey Taub after the presentations. "I liked that."

He also said that Duke University Health System's national reputation for quality care and treating poor patients brought value to that offer.

Duke's culture was to "treat any patient," he said.

In contrast, HMA was business-oriented, Taub said, adding: "This (Munroe) is where you fit into the (network)."

He also was concerned that if Munroe leased to the HMA/Shands partnership, Munroe's role would be to divert patients to Shands, which is already advertising for Marion County patients to go to the Gainesville research hospital.

Workgroup member Dr. Ken Marino said he also wasn't keen on Munroe possibly becoming a revolving patient door leading to Shands.

Community Health System didn't commit to funding Munroe's$150 million master facility plan, which includes a new wing of treatment beds -- an omission that Taub said was troubling.

Dr. Ravi Chandra said he wanted to know how any of the three partnerships would help Munroe increase its market share.

He said after the presentations that DukeLifePoint and CHS would probably use Munroe "as a focal point", but "how will they help us grow?"

Workgroup member Dr. Mel Seek said it's important to remember that Munroe had "never let the community down" in providing quality service to patients regardless of their ability to pay.

The "culture and values here still need to be able to flourish," he said.

Seek said he had experience with Duke's emergency department and that it readily accepted patients, regardless of ability to pay.

Shands HealthCare</org> CEO Tim Goldfarb said during his presentation that while Shands is sometimes a Munroe competitor, leasing to the HMA/Shands partnership would make Munroe part of the partnership "family" and no longer competitors.

"Ultimately, it comes down to a cultural decision," Goldfarb said. "It's a fit decision. Who are you comfortable with? Who do you trust?"

Goldfarb said that once Shands created a partnership with HMA, the health care company infused millions of dollars into Shands' facilities in Live Oak, Starke and Lake Shore. He said HMA increased the service lines of the three facilities and made the group profitable.

HMA said 65 percent of its hospitals had been recognized by The Joint Commission, an independent, nonprofit accrediting organization, as top performing health care facilities.

HMA Florida group president Alan Levine said HMA also accepts patients regardless of their ability to pay, and that patients HMA sent to Shands for advanced care were all sent back to their local physicians for follow-up care.

Duke LifePoint executives said if Munroe was looking for a partner that stood for quality health care, it need look no further.

They touted Duke's medical facility as being ranked the eighth best in the nation, and a slew of LifePoint hospitals have been recognized as top performers in providing quality care.

They also reported that physician satisfaction levels in Duke LifePoint facilities had risen to 85.2 percent.

They further cited Munroe's falling market share, which they said they could improve.

Since 2009, Munroe's patient market share has dropped from 46 percent to 43 percent, while the market share for local competitors -- Ocala Regional Medical Center and Shands -- grew.

Meanwhile, Munroe has seen the percentage of patients with private insurance decrease while the percentage of Medicare and Medicaid patients has increased.

David Miller, president of CHS' southeast division hospitals, said his company offers an executive team that's been with CHS for 15 years, far longer than most other health care leadership.

He said his company's goal was to build long-term relationships with its hospitals and convince patients its hospitals can provide all their health care needs.

He also said CHS hospitals on average perform higher than the national average in providing quality patient care, and that his hospitals' evaluations has improved for the past 21 consecutive quarters.

He also cited a 2012 company survey that showed 89 percent of CHS physicians were either satisfied or very satisfied with CHS' operations and the resources afforded them.

Contact Fred Hiers at 867-4157 or [email protected].

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