The two finalists, Health Management Associates (HMA) and Duke LifePoint, have been undergoing scrutiny for the past several months. Are there companies that might be better than these two but have not been pursued for consideration? That is an important question many people rightfully ask, but it will not likely be answered. The boat is probably too far over the waterfall to stop it and answer the question. The trustees must move ahead and play the cards they have been dealt by the Ponder & Co. consultants.
The seven-member Board of Trustees must now take action on the Work Group's recommendation. Assuming agreement with the recommendation, approval by 10 of the 13 Munroe Board of Directors also will be legally required to break the current 10-year lease and enter into a new lease with the company selected.
There are many factors the trustees are considering in making a decision between the two competing lease offers. A given is that the company selected must not diminish Munroe's status as the lowest-cost and highest-quality hospital in the area.
Additionally, there is another factor requiring discussion and special consideration in the decision process. The trustees need to answer the question of which of the two companies can do the best job in competing with Hospital Corporation of America (HCA) and Ocala Regional Medical Center (ORMC).
Yes, “compete.” Sooner or later, the relatively peaceful coexistence not-for-profit Munroe has had with ORMC over the years is going to change. This will happen as soon as a new for-profit lessee takes over Munroe and we have two local for-profit organizations competing with one another.
Why the change? Over the years, Munroe has served a different role as a not-for-profit than it will under a for-profit operating model. To a certain extent, Munroe has actually been a help to ORMC's operations and profit situation. Munroe supported ORMC by taking on certain unprofitable medical services and shouldering a larger volume of charity care. Additionally, Munroe's public not-for-profit existence enabled ORMC to receive $12.8 million of support from county government (taxpayers) coffers. With the change to a for-profit competitive situation, Munroe will very likely assume a much different approach in its ongoing relationship with ORMC.
A further complication in assessing which of the two for-profits to select is the fact that the “new Munroe” will continue to be faced with certain disadvantages it currently has in competing with HCA and its local hospital ORMC. Those two key competitive disadvantages are: 1) complying with the terms of a lease versus outright ownership and full autonomy and 2) dealing with a quasi-government and politically controlled bureaucracy (i.e., the Hospital District trustees). Both of these are operational complications that ORMC doesn't have to contend with.
The new Munroe is being asked to compete in a for-profit health care competitive system but with significant constraints. This is sort of like asking the Florida Gators football team to win a national championship wearing 1940s-style leather helmets, shoulder pads and football shoes.
Determining which of the two companies bidding for Munroe can do the best job of competing with the complications/restrictions being imposed on them is of prime importance in the decision-making process. I don't have an answer at this point, and I doubt that many of those involved in the decision process do either.
I worked for more than 30 years in a highly competitive corporate business environment. My experience indicates that competing with HCA/ORMC is going to require a company with exceptional resources, a proven operating model and the flexibility to compete on a playing field that still will be less than level. If the company leasing Munroe fails to meet these requirements, Munroe could lose its longstanding position as Marion County's “hospital of choice.”
In the November election, county voters decided on a new direction for our community's hospital care. Operating as a for-profit hospital is the new world within which Munroe must now survive. Like it or not, it is a fact.
Will the domination of our hospital services by two for-profit corporations be good or bad for local health care consumers? Our community will get the answer over the next several months.
Stan Hanson is a retired vice president of Procter & Gamble Inc. and former member of the Munroe Regional Medical Center Board of Directors.