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Maintaining high standards a key in Munroe's lease deal with HMA


http://www.ocala.com/article/20130419/ARTICLES/130419565?p=all&tc=pgall

Published: Friday, April 19, 2013 at 9:04 p.m.
 

Having chosen a private hospital company Thursday night to take over Munroe Regional Medical Center, the hospital's trustees will soon begin hammering out a lease with the company that will largely determine how Munroe operates for the next 40 years.

The Marion County Hospital District trustees, who oversee the public hospital for the residents of Marion County, chose Health Management Associates of Naples in hopes the company can stabilize MRMC's eroding finances.

HMA, which owns 22 hospitals in Florida, agreed to pay the trustees $212 million to lease the hospital and to invest more than $200 million to improve the building and upgrade equipment.

But several things must happen before HMA takes over.

In the coming weeks, the trustees and HMA will begin working on a lease that will get HMA's commitments in writing and also serve as the blueprint for the private-public partnership for almost a half century. HMA and Munroe officials said Friday that it could take four months to forge the agreement and close the deal.

When the lease is finished, the trustees will have to meet and cancel their lease with Munroe Health Systems, then approve the new lease with HMA.

While much of the language in the lease will be routine and legalistic, some of it will be designed to ensure that HMA continues Munroe's mission as a "safety net" hospital that provides significant charity care and an array of important but money-losing services to its patients.

HMA has agreed, for example, to continue Munroe's labor and delivery service, which perpetually loses money but is considered essential to the community.

"Clearly, OB and pediatrics are very important to Munroe and they are distinguishing features of the hospital," HMA CEO Alan Levine said in an interview Friday. "It is something we're very interested in keeping and growing."

In choosing between HMA and runner-up Duke Lifepoint of North Carolina, some Munroe trustees and supporters have noted that MRMC is considered a top-100 community hospital in the nation and have worried that the quality of care could slip in the hands of a profit-driven company.

But it will be challenging to develop lease language that obligates HMA to high standards of care, officials said Friday.

Trustee Chairman Jon Kurtz said quality is subjective and may be difficult to define in a lease. Instead, Kurtz believes the lease should be a framework that makes clear the trustees' wishes that certain services be provided, and at a high level.

"You do your best to make sure they understand your expectations and get those things in the lease," he said.

It's not clear whether Munroe CEO Steve Purves will retain his post when the deal is completed. But Purves, who has some experience with hospital leases, agrees with Kurtz.

Current standards cannot be used to guarantee performance because technology and other factors tend to make numerical standards change over time. He noted, for example, that a measurement of success in treating a heart attack patient in the 1980s would be considered substandard today.

Purves believes a key to ensuring quality is to require the new operators to report how their measures of quality stack up against industry standards and other hospitals.

"I doubt there's going to be a provision in there that if you drop below a certain level on something, you default on the lease. That's impractical," he said.

Peter Lawson, the executive vice president for development for HMA, said the company has to address the question of quality every time it acquires a hospital, so this is nothing new.

"Quality and culture are a bit subjective," he said, "You start with where you are and, as we all know, Munroe has excellent metrics overall. So you look at that and you put your resources into making sure there is improvement in the numbers."

Levine, the HMA CEO, said his company plans to meet with the Hospital District trustees annually and report how Munroe is performing compared to other hospital in the industry.

"So the district is going to have an opportunity to see how we're doing and help set the priorities for the coming year," he said.

While he understand the concerns about maintaining Munroe's quality, Levine said HMA's other hospitals are performing well, which reflects the company's commitment to delivering high-quality health care.

"The Joint Commission that accredits hospitals for the government rated 65 percent of our hospitals as top hospitals," he said.


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