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Details of plan to improve Munroe emerging


 

Published: Tuesday, January 28, 2014 at 4:17 p.m.
Last Modified: Tuesday, January 28, 2014 at 4:17 p.m.

http://www.ocala.com/article/20140128/ARTICLES/140129646?p=all&tc=pgall#gsc.tab=0

The April 1 date to hand over operations of Munroe Regional Medical Center to for-profit, Tennessee-based Community Health Systems is on schedule.

And as final contract negotiations continue, Marion County Hospital District trustees involved in the negotiations are beginning to elaborate on some potential specifics of the lease, including how the new operator will spend a promised $150 million on Munroe improvements.

Trustee Chairman Jon Kurtz said current negotiations would allow CHS to spend about $85 million for new construction at Munroe's main campus, $20 million for equipment, and the rest building satellite locations and service centers.

The latter category could include stand-alone emergency care facilities, clinics, and outpatient surgery services — all designed to bring patients and revenue to Munroe.

Under the current version of the lease contract, the trustees would receive — within six months of the April 1 closing date — CHS' proposed Facilities Master Plan, which would spell out specifically how the $150 million would be spent.

It would then be up to the trustees to determine whether CHS' Master Plan proposal was acceptable. CHS would have 18 months from the closing date to begin construction and five years to complete all building.

Under the contract, CHS also would lay out millions more for annual upgrades to the hospital over the next 10 years. The amount would be $75 million plus at least 4 percent of hospital revenue per year.

The $150 million for facilities and the additional money for annual upgrades are just part of the lease agreement. CHS also will pay the Marion County Hospital District $212.8 million for the right to operate Munroe for the next 40 years.

The trustees will use that money to pay off hospital debt — about $100 million. With the rest it will create a foundation that funds healthcare-related programs throughout Marion County.

Former Sheriff Ed Dean, who is helping trustees with the transition, said the deal was a good one, describing it as the “best deal we could probably achieve.”

“There are a lot of win/wins for us and Marion County,” Dean said Monday night during a trustee board meeting. “It's overall an excellent agreement.”

Trustee Joe Hanratty said he wasn't worried that some of the Facilities Master Plan money would be spent off site as long as Munroe benefitted from it. The new facilities also still belong to Munroe once the 40-year lease ends.

“We're still getting the $150 million. It's just being spent differently,” he said.

As part of the lease deal, Munroe's more than 2,000 employees will be guaranteed their jobs for one year after closing.

Originally, hospital district trustees selected to lease Munroe to Naples-based Health Management Associates Inc. Since that selection, CHS moved to buy HMA. The sale closed last week and was formally announced on Monday.

Before the sale, CHS owned or leased 135 hospitals in 29 states. HMA owned or leased 71 hospitals in 15 states, almost half in Florida.

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. That lease will end when the CHS lease begins.

Without property tax support — a ballot measure failed in November 2012 — Munroe leadership warned it must lease the hospital to a separate company to invest and keep the hospital competitive.

Kurtz said the CHS takeover of HMA was a good move for Munroe, praising CHS' management and organizational styles.

Under the lease, Kurtz said, Munroe would still fall under the HMA division of CHS. But CHS has a hands-off management style, so long as revenue projections are met.


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