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Gov. Scott Orders Florida’s 33 Public Hospitals Reviewed for Possible Privatization

| March 24, 2011

Goood thing they all quit before Rick Scott got to them.

Saying he wants taxpayers to get their money’s worth in health care, Gov. Rick Scott issued an executive order late Wednesday appointing a commission to scrutinize the performance and costs of hospitals operated by local governments.

His Commission on Review of Taxpayer Funded Hospital Districts has nine months to study whether it is in the public’s best interest to have government entities operating hospitals at all.

Flagler County has no publicly-run hospital. The nearest is Halifax Hospital in Daytona Beach, where many Flagler County patients, including most of its maternity patients, receive their care.

The governor was the chief executive of HCA/Columbia, a multi-billion dollar privately run hospital chain that competed with publicly run hospitals. Part of the thrust of Scott’s order is to explore whether publicly run hospitals should be competing with private hospitals to start with. “Many tax-supported and non-tax supported government-operated hospitals operate competitively with non-government operated hospitals while utilizing the benefit of taxes, enhanced Medicaid reimbursement and subsidies for losses, and in some counties, have acquired the assets of competing entities,” the executive order reads, implying disagreement with such arrangements.

“Many taxing authorities in Florida and in other states have divested hospital assets to independent entities through sale or lease, and such hospitals have thrived as private entities while continuing to serve the poor,” the order reads.

Beyond that, the panel is to look for the most effective model of providing health-care access for poor people.

“We’re spending a lot of tax dollars to do this and I want to make sure that the dollars are spent well,” Scott said at an appearance Wednesday afternoon at the Capitol. “Are we getting return for those dollars? Is it helping us with reducing the costs of health care?”

Business groups immediately praised Scott’s action. Scott appointed Dominic Calabro, president and CEO of Florida TaxWatch, an independent group that looks for ways to save money, to chair the commission.

But the panel will discover that public hospitals tend to provide good value, said Tony Carvalho, president of the Safety Net Hospital Alliance of Florida, a group that includes public and non-profit teaching hospitals.

They have to, he said, because they are required to prove their worth each year to elected officials or to the taxpayers directly.

“I certainly welcome any review of their operations and efficiencies …and the benefit their communities receive,” he said.

The order immediately brings to mind financially ailing Jackson Memorial, the nation’s third largest public hospital. But a search on the Florida Hospital Association web site indicates there are 33 publicly owned hospitals in the state, not counting the VA and state-owned institutions.

And they don’t look much alike.

“No two of them are the same,” said Linda Quick, president of the South Florida Hospital and Healthcare Association. “To come up with a position that would apply to all of them is going to be difficult if not impossible.”

Some are owned by county or city governments, while others are operated by independent elected bodies that have taxing authority – special hospital districts.

Some public hospitals – notably Lee Memorial Health System in southwest Florida – don’t even get local tax revenue, while some taxing districts distribute money to hospitals without owning or operating them.

Consider the difference between Jackson Memorial and suburban Coral Springs Medical Center. One of four hospitals in the public Broward Health system, Coral Springs has a lower percentage of indigent patients than many private hospitals, including some for-profits.

Wading into the dispute on what hospitals are paid is bound to remind Floridians that Scott resigned under fire in 1997 as CEO of the Columbia/HCA hospital chain, which he led for 10 years, after it became public knowledge that it was under federal investigation for Medicare fraud.

The company eventually paid $1.7 billion in civil fines, but Scott was never charged with criminal wrongdoing. He has said he didn’t knowingly participate in fraud but admitted he should have paid more attention to billing.

The recommendations in Wednesday’s executive order track those made by Scott’s transition team for health and human services following the election. Its chair, Alan Levine, said Wednesday night that Scott has “put forth a thoughtful process” for answering the questions that crop up every year on how to distribute money for care of indigent uninsured patients.

The process always ends up in a “food fight,” said Levine, who is now a regional president for Health Management Associates, an investor-owned hospital chain. The governor’s commission is a better way to go about it, he said.

From the executive order: the commission’s purpose:

A. Determine, based on objective data, whether costs in government-operated hospitals are higher or lower in comparison to similar non-government-operated hospitals offering similar services, and whether, assuming there is such a cost difference, it results in higher or lower Medicaid, Low Income Pool or other reimbursement, compared to other hospitals that provide care to the poor, and whether spending would be reduced or increased if the hospitals were operated at the same levels of efficiency.

B. Determine if there are better or worse outcomes on national measures of quality, such as the CMS Core Measures, in government-operated hospitals compared to non-government-operated hospitals.

C. Determine if models exist in Florida and other states where local taxing authorities have created innovative programs and access for the poor without operating hospitals and instead have created programs where the funds follow the patient to the hospital or outpatient service closest to their community.

D. Gather data and the various methods of providing access to the poor from each hospital district in Florida to determine the most cost-effective method for providing outpatient and inpatient hospital services to the broadest population possible and recommend the best models to the Governor and Legislature.

E. Determine if the existing governing-body model of the various government-operated hospitals optimizes the best governance practices, ensures proper oversight with accountability for the actions of board members, has had any violations of charter or governance rules by board members, has complied with the government-in-the-sunshine laws, and has consistently acted in the best interest of the primary shareholder
— the taxpayer.

F. Determine if taxpayer-funded hospital districts are using employment models for physicians wherein the physicians are being paid outside the norm for similar non-employed, non-tax-subsidized physicians in the geographic area, and whether other forms of compensation, such as medical directorships, are being used, and subsidized by taxpayers, for the purpose of competing with private physicians, and not-for-profit
and other community hospitals which enjoy no such tax-subsidy.

G. Determine the best mechanism for transition of government-operated hospitals to more appropriate governance models based on the experience of the many public and government-operated hospitals that have implemented such conversions. Determine, if appropriate to convert government-operated hospitals to different governance models, what the process should be for such conversion, provided that any
such process should optimize the return for the taxpayers on the value of the assets and should be transparent to the public.

Members of the commission:

Dominic Calabro (Florida Tax Watch CEO)
J. Scott McCleneghen (Managing Senior Vice President, City National Bank of Florida, Miami)
Jacob C. Jackson (Pompano Beach attorney)
Marshall Kelley (Tallahassee health care consultant)
Dwight Chennette (chief executive officer of the Palm Beach County Health Care District)
Brad Dinkins (Ocala Realtor)
Randall McElheney (Panama City pharmacist)
R. Paul Duncan (chairman of the Health Services Research, Management and Policy Department at the University of Florida)

At the discretion of, and by appointment of the Senate President, a member of the Florida Senate may serve as an additional member of the Commission. This member shall serve at the pleasure of the Senate President.

Read the full executive order.

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10 Responses for “Gov. Scott Orders Florida’s 33 Public Hospitals Reviewed for Possible Privatization”

  1. Jack says:

    Privatization of government services is nothing but corporate welfare in disguise. A private company’s ultimate fiduciary responsibility is to its shareholder. The government product/service becomes nothing but a commodity to extract a profit. The government product/service is the means by which the corporations usurp corporate welfare.

  2. palmcoaster says:

    Sure Scott is not the model and example to get into the Florida Health Care and Hospitals Privatization after his Medicare scam yet unpunished while In Columbia. Anyone going for his idea as far is my concern is into fraud and again the filthy rich Wall Street investment groups profiting from the less fortunate and our tax funds. This guy has to be recalled too.

  3. Jojo says:

    Everything Scott does now having to do with the health industry should be suspect. Does Scott have a vendetta or a ruse. Piss testing State employees quarterly is overkill. At $15. a contract test, that’s $60 an employee multiplied the number of State employees. Someone can make a few million yearly on that deal.

    I want a recall now before he destroys this State.

  4. Alex says:

    Adam Smith on Laws and business

    The proposal of any new law or regulation which comes from [businessmen],
    ought always to be listened to with great precaution, and ought never to be adopted till
    after having been long and carefully examined, not only with the most scrupulous,
    but with the most suspicious attention. It comes from an order of men, whose interest is
    never exactly the same with that of the public, who have generally an interest to deceive
    and even to oppress the public, and who accordingly have, upon many occasions, both
    deceived and oppressed it.
    o I.xi.p.10 (Conclusion of the Chapter)

  5. rickg says:

    If Governor Scott wanted taxpayers to get the most out of their tax dollars he would not have conspired to skim billions of dollars from Medicare and Medicade. Hypocracy runs rampant amongst the Rs…

  6. John Boy says:

    If you want a CDL License, the Department of Motor Vehiclles requires you to have a physical perform by Solantic Clinic’s which is owned by Scott’s wife. You cannot even use your private physican. This is simply another of Scott’s moves to screw the people of Florida while enriching himself and his criminal friends and supporters. Who voted for this fool, most bloggers are asking the same questions? I wonder if he was really elected or if he simply brought the politicans at the Conuty and State levels to declare him the winner? Nobody I seem make comments have admitted to voting for him…………

  7. Dorothea says:

    Mother has an excellent article on Governor Scott,

    “Florida’s governor is pushing a privatization plan that could be a major boon for health care companies. Like his.” Quote from Mother .

  8. palmcoaster says:

    Maybe Rick Scott fraud against Medicare while he was the head of Columbia “should be reviewed” and not our public hospitals. He is a smooth operator…better be aware of this man and better yet, recall him.

  9. Tom Brown says:

    The 9 suits on this panel are all busy people, so who is doing the staff work — which will largely shape their final report? My guess is it’ll be someone from the governor’s fast-expanding Executive Office. Let me take a wild stab at predicting their recommendation — privatization is wonderful, bring it on.

  10. Larry says:

    If this bozo was worried about taxpayers getting their money’s worth……………….HE WOULD NOT BE A MULTIMILLIONAIRE!!!!. They rob from the poor to enrich themselves………….People! get out and vote!!!!

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