|Ocala, FL -
October 14, 2012|
Published on Ocala.com Sunday, October 14, 2012 at 6:30 a.m.
What will happen to our local hospital if the “No” votes win on the hospital bond issue and it fails? Your trustees will move forward and chose one of the out-of-town, for-profit companies to lease your local not-for-profit hospital for 40 years, which is tantamount to a sale.
These large national medical providers are offering huge amounts of cash to lease the hospital. Depending on the final terms of the lease agreement, it could mean millions of dollars at closing to the hospital district. No matter the size of the total dollars, what you need to know is half of this money will stay with the hospital district trustees to fund indigent care. Half will go to the Marion County Commission for them to decide how it is spent for health care.
An example from comparable sale leases shows that these funds usually offset the cost of local indigent care for about 10 years. So who pays for the next 30 years?
Some people think this is a great deal because of the huge dollar amounts offered by these national, for-profit health care providers. An important fact is the annual net revenues of the hospital are between $340 million and $370 million. So the top offer is just about equal to the annual net revenues. They will have this hospital for 40 years and pay a price equal to one year’s net revenues.
Even with this kind of net revenue, the hospital is presently operating at a loss. So how will the new guy make a profit for their investors?
It isn’t rocket science: obviously by cutting unprofitable services like obstetrics and by maximizing the corporate staff to reduce local support jobs. It also is notable that limiting access for individuals who don’t have insurance is a standard with all for-profit hospitals. Another example is the hospital presently is budgeted to spend more than $20 million a year on maintenance. The highest amount offered in all the proposals is $15 million annually. It isn’t difficult to figure out when buildings age, as is the case with our hospital, you must budget more dollars for maintenance, not less.
So what will this hospital look like at the end of 40 years? As they say, the devil is in the details.
Munroe is in the top 1 percent of 5,000 hospitals in the country. That means they are in the top 50 in the nation in quality care. When you measure Munroe in the state, it ranks even higher. It is a top-quality hospital.
Moody’s Investor Service reports that Munroe is sixth in the nation in hospitals with the Highest Combined Medicare and Medicaid as a percent of gross revenues. This means, on average, lower payments for services. Even with these challenges, Munroe has shown it can be profitable — it just needs a better economy and for national issues on health care to get settled.
Our population is older and poorer than other places in the nation. These facts don’t change when the hospital becomes a for-profit. Again, one has to wonder how they will make a profit while still keeping the quality up and the cost down.
A report by the University of Florida shows Munroe is the largest private employer in Marion County, with 2,479 employees at an average annual compensation of $42,781 per employee. The total local employment impact of Munroe is 5,007 jobs, including full-time and part-time positions. This means Munroe helps create more than 2,500 jobs in local small businesses that depend on the hospital for their revenues and profits. If there were a loss of 10 percent of Munroe-related jobs, that would be 500 jobs lost. Our local elected officials spend millions trying to attract employers to the county that bring a few hundred jobs. Surely, it is worth the low cost to keep Munroe locally owned and operated for the benefit of future generations.
Munroe, by all measures, has succeeded in delivering quality care at a low cost to everyone who seeks it, whether they have insurance or not. That has been a challenge with all the unique forces at work in today’s economy. That is the benefit of a locally owned, locally controlled not-for-profit hospital. Currently, Marion County residents have a choice between a for-profit hospital and a not-for-profit hospital. Let’s keep it that way.
Please give careful consideration to the value of a not-for-profit versus a for-profit hospital when needing healthcare. Vote your choice Nov. 6.
Mike Sizemore is a retired railroad executive who serves on the Marion County Soil and Water Conservation Board and is a former candidate for the Marion County Commission.