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Hospital push for nonprofit partner may pose problem


Hospital leaders who have formed a collaborative committee to find a financially strong partner to up the chances of Indian River Medical Center’s long-term survival may have unwittingly jeopardized their effort by steadfastly and publicly repeating their preference for partnering with a nonprofit healthcare provider.

County Hospital District Board members Marybeth Cunningham and Allen Jones, and Indian River Medical Center Board chair Wayne Hockmeyer, are among those who have said they want a nonprofit white knight.

After the issue came up at last Thursday’s meeting of the publicly elected District Board, local physician Val Zudans, a former District Board member, produced a passage from Florida’s 2016 state statutes that cut to the issue.

The law (Title XI, 155.40) requires any petition for a hospital sale or lease to receive a final order from the office of the Secretary of Health Care Administration approving or denying the transaction. There are more than two dozen criteria that must be met to secure approval, including one that “the proposed transaction does not unreasonably exclude a potential purchaser or lessee on the basis of being a for-profit or not-for-profit Florida corporation or other form of business organization.”

In an interview afterward, Zudans said some District board members were dismissive of his warning. “Already three members of that board have publicly expressed a preference for a not-for-profit partner. I think they’ve left themselves legally exposed.”

The peril is that a for-profit suitor could claim the waters were poisoned against it well in advance. That could be a viable complaint to test in court.

District Board member Barbara Bodnar shares Zudan’s concern.

“Look at for-profits as well,” she said. “We don’t want the public saying we’re only looking at nonprofits. If you’re going to explore, explore everything.”

That point was reiterated several times at the last meeting of the Collaborative Committee, a group composed of District Board members and members of the Medical Center Board, but some hospital leaders still say they want a nonprofit partner.

“The gist is the resolve that the IRMC board intends to explore potential partnership opportunities with a special focus on not-for-profit entities, to provide the long-term delivery of high-quality healthcare services to the residents of Indian River County,” Medical Center board chairman Hockmeyer said last week.

Those insisting on a nonprofit partner seem to fear that a for-profit corporation would be more likely to make draconian cuts to programs.

In other business, the District Board also voted 6-1 to raise property taxes by about 15 percent, with Tracy Zudans cast the lone dissenting vote. If the proposed rate goes into effect, Indian River County homeowners would pay, on average, about $11 more each year to support the facility.

The board also approved a $2.2 million increase to its budget, which will rise to $15.3 million in 2018. Fully $1 million will be used to cover legal and consultant fees for the effort to find the hospital a partner.