Broward Health holds special public meeting to review House Bill 711 healthcare study
By Charles Moseley
The North Broward Hospital District (NBHD) Board of Commissioners conducted a special public meeting on Dec. 19, 2012 to review a study conducted by Deloitte Financial Advisory Services LLP. House Bill 711 signed into law by Governor Rick Scott last year, mandates that publicly run hospital systems in counties across the state of Florida, conduct an independent review of their operations to determine how they stack up to privately run hospitals.
House Bill 711 as amended by Florida Statute 155-40 stipulates among other things that public hospitals contract a firm with expertise in valuating hospitals to conduct a study to assess the hospital’s fair market value, conduct a public hearing, and compare publicly run hospitals with other hospitals which provide similar health care services which are either not-for-profit or for profit hospitals. The law further states, “The comparison must also determine whether there is a net benefit to the community to operate the hospital as a not –for profit or for –profit entity and use the proceeds for the sale or lease for the purpose described in the statute.”
The study also took into consideration a number of variables in reaching its conclusion, including whether the hospital would be profitable in the future under its current business model.
Secondly, it considered how the hospital compares with similar businesses which are privately held and have been subject to similar investments or assets that have been sold or offered for sale.
Thirdly, so-called “cost approach” factors in what it would cost to replicate the assets of an entity with one which closely resembled the operation in question.
Deloitte representative Adam Sorenson presented the study before the NBHD Board of Commissioners during the special public meeting in which he discussed the healthcare industry, its economic trends, and how Broward Health compared with a number of other hospitals in areas which included; cost per day patient stay, patient satisfaction, outcomes of care, and cost and quality of care. Sorenson encouraged the Commission to be proactive in the face of future changes in healthcare legislation which would impact all healthcare operations whether they were public or private.
Commissioner Clarence McKee expressed some reservations regarding the possibility of having hospitals come under the jurisdiction of either a county commission or city council which he said may not have the level of expertise necessary to make the decisions to properly oversee a healthcare operation. He pointed out a scenario in which that might happen. His concern was whether healthcare decisions should be left up to city officials?
“The danger is when you give a city commission a quarter of a million dollars or half a million dollars; you’ll have a line of lobbyists outside their door to help them with what health needs need to be served.”
McKee offered his analysis of the current manner in which the North Broward Hospital District was being run by saying he saw no need to alter the basic operating status of Broward County’s public healthcare system. He noted that the system had either met or exceeded its objective of providing quality healthcare at an affordable rate. As far as he was concerned, he favored maintaining the status quo into the foreseeable future, regarding the North Broward Hospital District, remaining a publicly run operation.
“I see no public interest benefit in the sale or lease of our hospital system at this time. We are an ‘A-rated system’ by our rating agencies. I also am not convinced that a sale or lease would provide the indigent with any better access to quality healthcare or that our community health care efforts would be maintained.”
Finally, there are still many uncertainties regarding how Obamacare will impact patients as well as hospital and physician reimbursements to change at this time. “If the wheel isn’t broken don’t fix it.” BH’s wheel is in good shape as to cost effectiveness, productivity and patient care measures—we compare favorably with our peers. So, no need to change.”
Broward Health President/CEO Frank Nask painted a relatively rosy picture regarding the current state of the member hospitals and community out-reach clinics overseen by Broward Health. He cited the recent approval for two additional outreach centers and two urgent care facilities approved by the NBHD Board of Commissioners. He also felt that there was little if no difference in the quality of healthcare among the various hospitals studied by the firm, which evaluated those that are located throughout South Florida.
“I see no discernible difference between quality and cost per peer groups in the tri–county area. I think that we have been performing well,” said Nask.
Not all the NBHD Commissioners were happy with the way things were going and at least one discussed the possibility of closing one of the NBHD facilities. Commissioner Paul Hus indicated that although he sympathized with residents who lived near the Broward North Hospital he said that it might be in the interest of the NBHD to close the facility down. He said that Broward North was in dire need of improvements and that the facility had lost between $70 and $75 million over the last five years.
“Broward North operates at 52 percent bed capacity. It has cost $70 million to put bandages on Broward North.”
Edith Lederberg, executive director of the Aging Disability Resource Center of Broward County pleaded that Broward North Hospital remain open.
“We all know that when we start cutting costs it slashes services and quality of care. If it’s not broken don’t fix it. I urge and strongly support the current system which has been effective and efficient.”