Hospitals Don't Buy Governor's Healthcare Finance Commission

May 15, 2015

Tallahassee Memorial Hospital is a private hospital, but serves as the region's safety net system.
Credit Tallahassee Memorial Hospital / TMH

Governor Rick Scott is keeping up his criticism of the federal government as the state braces for all or a partial loss of a $2 billion healthcare program. As Scott has bashed the federal government over the low-income pool, he’s also taken aim at hospitals—and is moving ahead with a workgroup to study their finances.

Governor Rick Scott is a former hospital executive. He founded and ran one of the nation’s largest hospital chains (though it paid a massive Medicare fine) and he’s recently been touting that experience.  So when Scott announced the formation of a workgroup to study healthcare finance, he put hospitals and insurance companies, on notice.

"Let’s look at how we’re spending our dollars, are we getting a good return for taxpayers—the people putting the money up. The people around the state, are families able to afford their healthcare. Do they get a good outcome. What’s patient satisfaction? We want to make sure there’s a healthier system for everybody," Scott recently told reporters.

The legislature remains mired in a stalemate over how to address a potential loss of the low-income pool. The state gets a billion dollars in federal money to match with local dollars—and the $2 billion pool reimburses hospitals and other healthcare providers for indigent care. The Senate believes any losses can be made up if Florida expanded Medicaid, but Scott and the House are opposed.

Meanwhile, the Governor has forged ahead, naming nine people to his healthcare financing panel. Among them are one doctor, and several Scott-appointees to college and university boards, including North Florida’s Eugene Lamb. He’s a Scott supporter, former Gadsden County Commissioner who now sits on the board of Tallahassee Community College. He was chair of the Gadsden Commission when the county attempted to restart its hospital.

“I gained a lot of experience through working with Tallahassee Regional, and I know there are a lot of small, rural counties having trouble with their hospitals in trying to get funds," Lamb said.

But the Commission is already running into criticism that its members don’t have much, if any health care experience. And lawmakers who volunteered to serve on the panel, were also left out. Meanwhile,  hospitals are wary, especially when it comes to the Governor’s idea that they share profits.

“It appears on the front end, to be a form of a tax and the question is do you want to create an environment where tax an entire industry and redistribute income," said Tallahassee Memorial Hospital CEO Mark O'Bryant.

Hospitals have been at the center of Florida’s healthcare fight—supporters applaud them for pushing a plan to expand Medicaid in the state. Critics label them as greedy, trying to turn a profit. And they point to what’s known as a cost-shift in the healthcare industry—people with insurance pay more to offset the cost of those who are un or under insured. O’Bryant says the markup is found the rates negotiated with insurance companies—it’s not a hidden cost on a patient’s bill.

“We at least have to make as much as we spend to keep our doors open. In order to reinvest appropriately in technologies and staffing, etc. to improve, we have to make a little bit more," he explained. "Because if all we did was break even every year we would have no ability to reinvest in technology and programs that our community needs.”

TMH is a private hospital, with a board. The Low Income Pool makes up about  one percent of its budget, and O’Bryant says the hospital would be fine without it. But that’s not the case with Shands Jacksonville. It’s one of five hospitals in the state that’s been identified as a critical center—which means it treats high numbers of uninsured patients. It’s hospital CEO Russell Armistead recently addressed lawmakers on the issue:

“It’s $120 million to Jacksonville. It’s 20 percent of my revenue and if I lose it, I’ll close in a  few months," Armistead said closure could be devastating to the Jacksonville region.

“We’re the seventh-largest employer in Jacksonville, over 7,000 employees, 4,000 in the hospital--almost 50 percent African American. 700 physicians, 350 in the training program and 350 who are teachers in the training program, as well as another couple thousand who are members of UF [University of Florida] related organizations.” he told a Senate health last month.

A Congressional House panel has scheduled a hearing on Florida’s fight over the low-income pool. Governor Scott has asked the federal government whether it will consider lowering income eligibility so more people can get coverage on the federal insurance exchange. He’s also asked about block grants—all areas he wants his commission to consider. But whether it will get much cooperation is unclear.

Private hospitals are by definition—private, and they might not turn over their finances. And most, but not all of the information the Governor has requested is available on the state's floridahealthfinder.gov website.

The same is true with many health insurance companies. Scott has also inquired about their finances. Furthermore, there are plenty of doctors, nurses and other healthcare professionals in the state legislature—and they may not be swayed either. 

--

*Correction: An earlier version of this story stated, "TMH is a private hospital with a board and investors." While TMH is private, it does not have investors.

*Clarification: Governor Rick Scott is asking hospitals to turn over specific information regarding their finances. Most of what is being requested is available online, but there are other topics that some hospitals may not have, or may not turn over due to privacy concerns, such as negotiated payment rates.