A lobbying effort is under way to persuade Florida Gov. Lawton Chiles to veto a bill that would allow for-profit chains to purchase or lease public hospitals that have converted to private, not-for-profit facilities.
In an unusual alliance in support of the bill, recently passed by the state Legislature, the Association of Voluntary Hospitals of Florida and the Florida League of Hospitals joined forces. The AVHF represents 80 not-for-profit hospitals; the Florida League represents 80 for-profits, including nearly 60 owned by Columbia/HCA Healthcare Corp.
The AVHF contends the bill is primarily an effort to clarify the former public hospitals' legal standing as private, not-for-profit organizations.
Opposing the public hospital bill are the Brevard County Commission, the Indian River County Commission and Wuesthoff Hospital, a 241-bed private, not-for-profit facility in Rockledge. They asked Chiles to veto the bill and revisit the issue next year.
Robert Carman, Wuesthoff's administrator, said the bill has several flaws. It doesn't require competitive bids or fair market value payments for leases. Also, it doesn't ensure the public receives the proceeds from a sale to a for-profit chain.
"Without proper language in the bill, the proceeds (of the sale) could be placed in a fund for that for-profit hospital's indigent care," Carman said. "The buyer (for-profit) gets the money back, and the public gets nothing for its tax contributions over the years."
Over the years, 40 public hospitals have converted to private, not-for-profit status for competitive purposes. But action by the Florida Supreme Court earlier this year calls into question the legality of many of these conversions, prompting the AVHF to write the bill.
The Florida Supreme Court agreed with a lower court's ruling that it is illegal for a public hospital to convert to private status and relinquish "unfettered control over public property" and "taxing authority and money, including expenditure of ad valorem taxes, without public oversight or accountability."
The case involved 63-bed Everglades Regional Medical Center in Pahokee and the Palm Beach Taxing District, its parent organization. Everglades opposed the district's downsizing plan and filed suit to seek ownership.
The AVHF's bill would preclude hospitals from facing accusations of illegal or improper conversions to private status if they correct legal problems in their organizational structures within a year.
But the association didn't stop there. It also added language, at the request of the Florida League of Hospitals, that would allow for-profit hospitals to lease or acquire private not-for-profits that had been converted from public hospitals. Under current law, public hospitals may lease or sell only to not-for-profits.
"For-profit (chains) can purchase the hospitals anyway," said Anthony Carvalho, the AVHF's vice president. "(For-profits) own half the hospitals in the state and wanted to be recognized in the bill."
Carvalho also said adding for-profit hospitals to the bill also gives public hospitals more options if they decide to sell or lease their facilities.