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Two nonprofits make late play to lease Munroe

Ocala, FL - December 10, 2012
Published on Ocala.com Monday, December 10, 2012 at 10:02 p.m.

Two last-minute not-for-profit health care companies could be joining the group wanting to lease Munroe Regional Medical Center.

Baycare Health System, a 10-facility public health care company in the Tampa Bay area, which includes Morton Plant Hospital and St. Joseph’s Hospital, announced it was now interested in leasing Munroe.

The second health care group is the newly formed University of South Florida Health System. The organization recently announced a new partnership with Lakeland Regional Medical Center and apparently plans to expand to include more medical facilities. The new partnership is also a nonprofit health system.

Ponder & Company, hired by Marion County Hospital District Trustees to help lease Munroe, announced the two additions during a trustee meeting Monday.

The two new tentative proposals are in addition to two for-profit health care companies, which have been in negotiations with Marion County Hospital District trustees, which owns Munroe.

The two new potential additions were welcomed by trustees because most trustees members said early in their search they preferred a nonprofit partnership rather than leasing to a for-profit health care company.

But Dave Atchison of Ponder & Company warned that neither of the two nonprofit late comers will likely be able to offer the amount of money the two for-profit companies have offered to trustees in lease payments and promises to improve Munroe.

One of the for-profit health care companies is an HMA/Shands Hospital partnership offering between $440.2 million and $500.2 million to lease the hospital.

The other health care company is Duke LifePoint Healthcare, a joint venture of Duke University Health System and LifePoint Hospitals, which is offering $375 million for a 40-year lease.

Munroe is owned by the state-sanctioned Marion County Hospital District and the nonprofit hospital is overseen by seven trustees who are appointed by the County Commission. The trustees now 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.

The trustees formed Munroe’s Strategic Options Workgroup, which is made up mostly of District trustees, and tasked with finding the best lease partner

Hospital District trustees are entertaining lease bids as a means of generating the money that hospital executives say is necessary to remain competitive. As part of any lease agreement, the hospital wants a commitment of $150 million for improvements to the facility.

But Atchison said the two late comers aren’t likely to come up that kind of money.

Trustees agreed to slightly delay the lease search process a couple of weeks to give the two nonprofits time to send trustees formal, written proposals.

Dr. Ken Marino said that the health care landscape is changing and pressuring hospitals to find partners to keep costs low and expand market share.

But after Monday’s meeting Marino said that while he’s willing to hear their offers, the purpose to explore leases was the need for money.

“That’s the whole reason this got started,” he said.

In an unrelated issue, Atchison said HMA was willing to meet with trustees during March or April to address any concerns about a recent 60-Minutes television program in which former HMA doctors complained they were pressured to admit emergency room patients to increase profits. The U.S. Justice Department is investigating those complaints.

But Eb LeMaster, also of Ponder & Company, said trustees have ample time to research the allegations for themselves.


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