Published: Wednesday, September 7, 2011 at 9:07 p.m. in Ocala Star-Banner
County Commission Chairman Stan McClain wants the trustees who oversee Munroe Regional Medical Center to break the lease with the management company that runs the hospital before it automatically renews for another 10 years.
In a letter to Hospital District Trustee Chairman Dr. Michael Jordan, McClain expressed concern about the hospital continuing to lose money under the leadership of Munroe Regional Health Systems, Inc., the private, not-for-profit company that runs the day-to-day affairs of the medical center, Rather than automatically entering a new long-term lease with MRHS, he wants the trustees to hold an emergency meeting and cancel the lease, giving a private consultant time to suggest ways of shoring up the financially struggling medical center.
The lease between the Hospital District trustees and MRHS expires in September 2013. The trustees are requited to notify MRHS by Sept. 30 if they are not going to renew the lease. If they don't, the lease automatically renews until Sept. 2023.
The decision as to the lease will be made by the seven-member Hospital District trustees and by the 13-member hospital board. Five of the seven trustees and 10 of the 13 hospital board members must agree to cancel the lease. The trustees also sit on the hospital board.
On Aug. 29, the hospital board voted to extend the lease with MRHS until September, 2016, instead of 2023. That would have given the board and trustees time to continue looking for ways for the hospital to become financially secure and still keep each of the players on the court. The measure failed, however, when it didn't get the required super-majority vote of the trustees.
That means the lease will automatically renew, which McClain said some believe "is not a responsible decision." He said "there is a concern that the Board of Trustees ‘dragged their feet' " in considering options for fixing the hospital's financial problems.
In his Sept. 1 letter to Jordan, McClain said that simply renewing the lease without viable options to create more revenue for the hospital was not good planning.
"In light of the recent financial presentation given by the hospital administration of extreme budgetary shortfalls in the range of 30-60 million dollars over the next four to five years, the possibility that the taxpayers of Marion County could have this dropped in their laps with no reasonable alternative, after the (hospital) district's reserves have been exhausted ... is not acceptable," McClain wrote.
During its August meeting, trustees agreed to have Ponder and Company develop a range of options for the hospital in finding additional revenue. Those could include a joint venture with a for-profit hospital system or a referendum among county voters for a hospital tax.
Meanwhile, McClain is asking trustees to meet this week and vote to not renew the lease. Ponder would be allowed to continue its research into hospital options. The next step would be to consider the consultant's findings by May 31, 2012, and, if the trustees considered it in the public interest to do so, extend the lease with MRHS to operate the hospital again.
Asked Wednesday if he responded to McClain's letter. Jordan said he hadn't but would.
"The letter is being considered," he said, adding that a response would come "in good time."
Jordan said no decision had been made about holding an emergency meeting.
District trustee Joseph Hanratty said he would be willing to consider a lease termination such as the one McClain proposed. During the Aug. 29 meeting, Hanratty voted to extend the lease one year, but the motion was defeated. He then voted to end the lease, but that also was defeated.
Hanratty said Jordan's resistance to an emergency trustee meeting allows Jordan to maintain the status quo and automatically extends the lease.
"I think Dr. Jordan is trying to run out the clock" until the lease automatically renews, Hanratty said.
Hanratty said all options should be on the table, including finding a nonprofit or for-profit health group willing to create a partnership with Munroe Regional.
Such joint ventures are becoming commonplace.
One of the latest being considered involves nonprofit Bay Medical Center in Panama City, which would lease its facility for 40 years to private LHP Hospital Group of Plano, Texas, and Sacred Heart Hospital System.
Munroe and Bay Medical are similar.
Like Bay Medical, Munroe provides an increasing amount of indigent care, making it more difficult to operate in the black.
Munroe lost about $20 million providing indigent care and dealing with bad debt. And like Bay Medical, Munroe is a safety net hospital that provides care to the poor beyond just emergency room treatment.
It also provides services that are money-losing ventures but are needed by the community.
Critics of Munroe forming a joint venture that could mean an infusion of badly needed cash for the hospital warn that the deal would ultimately lead to cuts in services.
Hospital District trustee Kulbir Ghumman said that it was up to Jordan to respond to McClain's letter.
"It's the prerogative of the chairman to call a meeting," he said, adding that if one was called, he would attend.
"I would consider every option. That's my duty," he said.
The hospital's fate, Ghumman said, would likely rest with the voters.
But Hanratty said the trustees have dragged their feet in seeing what kind of financial deals could be struck.
"My point is, we don't know what's out there because we (the trustees) have never been allowed to have a presentation made to us," he said. "Let's find out. Let's pose the question."