Following Up The Lee Health KaufmanHall Report
And a New Epiphany...
Cliff Notes For… The Rest of The Story….
Remember Paul Harvey? He did great radio shows updating America on all aspects of news and our culture. He featured “the rest of the story”. That is what this series of Substack posts about our local Lee Health Enabling Act has been attempting to share with Joe Q Public.
Let’s Review The Pearls From…. The Rest Of The Report….
Remember from the last update. I am quoting from the report and then providing my critiques/editorial comments in bolded italics. From Page 26 of the report.
“While the financial considerations associated with a potential conversion were readily identified and estimated by those involved with the evaluation, many benefits are challenging to quantify during the defined timeframe as they are contingent on execution in a post-conversion structure or the benefits are more intangible in nature, without a direct economic measure..” ( The math looks bad, so we hope you can look past that).
“To the extent the Lee Health Board and management…to be a trusted partner, empowering healthier lives through care and compassion– we recommend Lee Health continue with the conversion process. (Let’s be objective here. Lee created a government sanctioned (prior enabling act), local monopoly and took over a large proportion of the community physician, diagnostic, nursing, home health, rehabilitation and assisted living health services and has conditioned Joe Q Public to believe they are to the trusted partner. Does the general public honestly believe they deserve our trust?).
“Regarding finances: For the purpose of providing funds to be used in connection with the Lee Memorial Health System, the system board, at its discretion, is authorized to issue general obligation bonds in the amounts necessary to pay the cost thereof. The LH board may deposit or invest its surplus funds in interest-bearing accounts, instruments, or securities to the fullest extent permitted by general law”. (This debt obligation appears to be a state government sanctioned, “indirect taxing authority” as well as a mounting cash war chest. Note the “liabilities” that the county will assume for this conversion).
“Revises provisions related to purchasing real property, entering into financial agreements, & managing funds. Removes provisions related to execution enforcement of liens”. (That is a lot of provision authority-just glossed over. PLEASE EXPLAIN.)
I Wish To Remind The Readers- Lee County and Its Local Monopoly Is a Microcosm Of General Business Models in The Country.
“Non-hospital competitors continue to target specific population
segments with lower cost business models”. (THERE IT IS FOLKS- THERE IS A MORE COSE EFFECTIVE ALTERNATIVE THAN A HOSPITAL SYSTEM TO DELIVER HEALTHCARE. Enter- the modern world and how surgical
innovation and technology is allowing more cost effective (non hospital) health care to be delivered.).
(ENTER THE REAL COMPETITION- This should be the doctors’ arena). “Recent emphasis on capitalizing on the shift to outpatient surgeries or targeting value-based care platforms, driving additional volume outside the traditional hospital setting”.
“ In certain instances with shared ownership or operational
management models”. (This is telegraphing Lee’s intention to buy more non hospital health care assets. This means more medical practices and buildings. This means more consolidation and consumption of the hospital’s present business competition. Doctors and their practices are on the menu).
“Several public / government owned hospitals of similar characteristics to Lee Health are transitioning to or partnering with private nonprofit corporations.” (Monkey See Monkey Do, justification for this transition).
“There is a growing risk of stalled supplemental payment increases”. (Gee Golly, Uncle Sam Is Having Problems Borrowing More Money To Pay For Our Business Model).
“Florida House Civil Justice Subcommittee approved HB 569 by a vote of 17-1 while a similar bill (SB 472) was introduced in the Senate, weakening sovereign immunity protections for governmental agencies.” (By golly, our long standing assumption that we can’t be successfully sued for poor outcomes was successfully challenged by a legal lawsuit. “Dear public, us (Lee) losing Sovereign immunity in this transition proposal is “no big deal”. I beg to differ. That settlement took a legislative act by the Florida state congress and is a very high bar to meet. The cost of buying real malpractice insurance for all the doctors and health care extenders is going to be far more than KauffmanHall will predict).
“Florida’s political position on the healthcare industry is predominantly pro-competition and consumer preference, which places pressure on health systems, services, and business models.” (The government is realizing that they are not equipped nor required to run health care. The free market will manage this far more efficiently. This has put Lee Health and other Government hospital systems on notice).
High performing specialty services that help support the safety net mission will likely be targeted by competitors. (This means Lee will intend to buy speciality care services and practices. They are doing this actively already- just look around).
The repeal of the CON requirement presents opportunities for health care systems seeking to expand their footprint and service offerings. (We were just told by the Florida legislature that our monopoly status is no longer).
“Tampa General Hospital and Orlando Health are examples of community-focused nonprofit corporations that utilize creative growth strategies such as partnerships and acquisitions to expand their geographic footprint
and services available for patients.” ( We can beat them or we can join them. What do you think- is Lee prepared to outcompete these two well established and far more experienced hospital systems? Hence my prior conclusion-joining hands with Tamp General makes strategic and survival sense).
The LH Board and management anticipates continuing and enhancing the safety net mission of LH, which would be memorialized in an agreement with the Board of County Commissioners. (Dear Joe Q Public, Lee will get their current safety net directive turfed to the county. You will soon be taxed or bonded for enabling Lee to attempt to either compete in the rapidly changing regional health care market and/or transition to a joint relationship with Tampa General or other regional/national hospital system. Revenues will be switched from current Federal and State subsidies to Residency training government dollars in this process. Your accumulated health care assets will remain the property of Lee Health).
This Gets Us To Page 46 of The Report- But Meanwhile The Epiphany!!
It dawned on me that if Lee dissolves its public charter and board oversight, it will be far easier to divest of the Lee Health downtown campus. The Lee downtown campus was the nidus of all of Lee’s history. For this very reason it is an obsolete physical structure as far as hospitals go. It is over a century old as a facility. Noting that presently structured, Lee Health’s board is publicly voted for based upon regional districts. Suggesting that the Lee downtown campus be shuttered is a political no no under the present public district structure. IF Lee Health dissolves this charter and goes to a private not for profit status, the new board is not beholden to a specific voting district nor constituency. It will only take an administrative decision and a private board majority to shut this location down. That frees up a lot of capital for the new location as well as provides a patient feeder source for their soon to be built new hospital location. THAT FOLKS- IS HUGE AND OBVIOUS STRATEGICALLY.
The rest of the report is mostly about trying to reassure the doctor stakeholders and others about how the cost of transitioning will be mitigated by (hopefully) other income streams mostly from the residency training revenues and ensuing government benefits from providing this service.
I believe this last update and the prior other posts on this Lee Health governance switch provides everyone and especially my physician colleagues ample information to form adequate opinions about our role and opportunities to speak and make business decisions on behalf of patients and the profession as we confront the ongoing attempt for the corporate take over of our noble profession.
Thank you for your insight on this issue. Sound like positive news if what you mention comes to pass. Competition is the name of the game.