In a hotly contested bidding war, Columbia/HCA Healthcare Corp. and Cigna Health Plan of Florida won an estimated $11.4 million contract to provide healthcare services to Charlotte County, Fla.'s 1,000 government employees.
It was the second time in two years that Columbia/HCA bested a not-for-profit hospital in southwest Florida.
Late last year, Columbia/HCA won a $7 million contract to serve Lee County's government employees over another not-for-profit, 627-bed Lee Memorial Hospital in Fort Myers (Nov. 1, 1993, p. 3).
Charlotte County, just north of Lee County, selected Columbia/HCA's 254-bed Fawcett Memorial Hospital over 212-bed St. Joseph Hospital, which had held the county contract, and 148-bed Medical Center Hospital, a for-profit facility in Punta Gorda. Fawcett Memorial and St. Joseph are both in Port Charlotte.
Charlotte County will save nearly $3 million over the three-year life of the contract, said Bill Hussey, president of Columbia/HCA's southwest Florida division.
But Kevin Potter, St. Joseph's president, said the county's analysis was in error and that St. Joseph offered the lowest bid. "We felt we were $100,000 less than (Columbia/HCA's bid)," he said.
The Charlotte County analysis concluded that Columbia/HCA's bid was $10,000 per year less than that of St. Joseph.
But unlike in Lee County-where charity care provided by not-for-profits vs. taxes paid by for-profits became a public debate-St. Joseph officials argued privately with commissioners that their larger charity-care load should be considered when awarding the bid.
St. Joseph provides about $3 million in annual charity, Mr. Potter said. "(Fawcett Memorial) does far less, about $300,000 in charity, and even the $1 million in taxes they pay doesn't come close to our charity care," he said.
That argument, however, failed to sway officials, Mr. Potter said. Under state law, county commissioners were obligated to select the lowest bidder.
Mr. Potter said the larger community benefits that St. Joseph provides gives it less flexibility to shift costs and discount charges than Fawcett Memorial.
But Ward Bond, Fawcett Memorial's president, rejected St. Joseph's claims of greater community benefits. He said charity care provided by not-for-profit hospitals only justifies their continued tax exemptions, not special advantages.
"The commissioners made a business decision after comparing bids," Mr. Bond said. He said he strongly believes for-profit hospitals contribute more to communities when their charity care, bad debt and total tax obligations are compared with those of not-for-profits.
Mr. Bond cited a previous study conducted by Columbia/HCA on seven not-for-profit hospitals in the Lee County area that indicated their community benefits did not justify their tax exemptions. The not-for-profit hospitals criticized the study as flawed.
At press time, Fawcett Memorial couldn't provide exact figures on its community benefits.