Facing objections from public hospitals, a panel appointed by Gov. Rick Scott could call next week for revamping local hospital-taxing districts — including turning them into “indigent health care districts.”
The Commission on Review of Taxpayer Funded Hospital Districts discussed a draft report Tuesday that also could lead to local votes on district taxing powers and call for more oversight of the sales or leases of public hospitals.
Commissioners, who have been studying hospital districts since May, likely will finalize the recommendations Dec. 29, as they meet a New Year’s deadline for sending the report to Scott and lawmakers.
“The real work is going to happen on the 29th,” said Chairman Dominic Calabro, president and chief executive officer of Florida TaxWatch. “I think we’re going to bang it out on the 29th.”
A key part of the draft would re-label districts as “indigent health care districts” and try to prevent tax dollars from getting funneled to only certain publicly funded hospitals. The basic concept is that money should be able to flow to wherever indigent patients get care, whether that is public hospitals, private hospitals or other types of providers.
“I think we’re looking at moving more towards a focus on providing indigent health care,” Calabro said.
But commission member R. Paul Duncan, a health-policy expert at the University of Florida, said he is concerned that such a change could lead to creation of a “kind of charity hospital system” that only would serve low-income and uninsured people.
Duncan said public hospitals would not have as much money to buy equipment and modernize facilities to compete with private hospitals. As a result, he said insured patients might drift to the better-equipped private hospitals, leaving behind low-income and uninsured patients — and, ultimately, affecting the quality of care at public hospitals.
Hospital-industry officials have closely watched the commission’s deliberations, though it remains unclear whether lawmakers will act on the recommendations during the 2012 legislative session. Scott recently said such action might wait until 2013, as redistricting will dominate much of the upcoming session.
Nevertheless, Scott, who made a fortune as chief executive of the Columbia/HCA hospital chain, has made clear he would like to see changes in public hospitals. In a March executive order creating the commission, Scott said in part that the panel should determine whether it is “appropriate to convert government-operated hospitals to different governance models (and) what the process should be for such conversion.”
During Tuesday’s meeting, representatives of public hospitals objected to several parts of the draft report.
For example, Jim Zingale, an official with the Safety Net Hospital Alliance of Florida, questioned the accuracy of some of the report’s findings. He said they might have been true for individual hospitals but were presented as applying to the broader array of hospital districts — which are set up and operate in varying ways.
One part of the draft report that drew heavy discussion Tuesday calls for setting up a “sunset” process to review district taxing authority every eight years. Local referendums would have to be held to again approve the taxing authority.
But William Woeltjen, chief financial officer of Sarasota Memorial Health Care System, said such a requirement could harm the ability of public hospitals to issue bonds to make improvements. That is because bondholders would not be assured that tax dollars would be available in the future to pay off the debts.
“That is really going to impede the ability of hospitals to finance their operations and finance their programs,” Woeltjen told the commission.
Calabro acknowledged that the final recommendations likely would have to address the potential effects on bonding. He said, however, that the commission thinks voters should be able to review taxing authority.
The draft report also touches on a legislative controversy about putting new requirements on the sale or lease of public hospitals. A lobbying battle erupted last year about bills that would have required such deals to be approved by circuit judges — a battle that again is expected to play out during the 2012 session.
The draft does not provide detailed proposals for addressing the issue, but Calabro said it is important to make sure sales or leases are in the public interest.
At least part of the issue stems from the botched merger of Volusia County’s public Bert Fish Medical Center with the non-profit Adventist Health System. That deal was scrapped after it was disclosed that the Bert Fish board violated the state’s open-meetings law in discussing the merger.
“What you want to make sure is it’s not an inside job,” Calabro said.
By Jim Saunders
