Lee County Health Care Checkup
BY JEFF CULL jcull@florida-weekly.com

A year ago this week, Lee Memorial Heath System bought its competition - for more than half-a-billion dollars - effectively creating a monopoly for health care in Lee County.

Critics railed that the purchase of Hospital Corporation of America's Southwest Florida Regional and Gulf Coast hospitals would end the competitive balance. After all, competition is the incentive to improve service, keep prices down and creative new benefits for customers. For the nearly 600,000 hospital customers in Lee County that incentive is gone. But that's not such a bad thing, says

FLORIDA WEEKLY PHOTO Lee Memorial Health System is buiding a new hospital near the corner of Metro and Daniels, next to it's Gulf Coast Hospital. The new facility, with nearly 10 acres of medical space, is about four months ahead of schedule.

hospital management. Not having to spend time and money reacting to the competition has let managers focus on the broader health-care puzzle.

"We're better because we're not spending time and money chasing the competition," said Jim Nathan, CEO of Lee Memorial Health System. "We have a chance now to figure out how to deliver the maximum care for the best price."

Whether that's the best price for consumers, or for the hospital system, remains to be seen.

When HCA's two Fort Myers hospitals competed directly with the Lee system, officials at both systems had to keep a close eye each other. When HCA began building a new $285 million hospital at its Gulf Coast campus, Lee countered with a $130 million expansion plan of its own. When Lee added a new piece of medical equipment, HCA countered with a similar one. It was duck and parry, act and react.

And the playing field wasn't always level.

The Lee system, as a public hospital, had to care for everyone whether they could pay or not. Private hospitals don't have to take everyone. That drains millions of dollars a year from the hospital system's coffers. And there was no tax money to offset the loss.

Nearly every public hospital in Florida gets public tax money to help cover the costs of that indigent care. But not Lee healthcare (and a small medical facility in Panama City). That cost is borne by the users of the hospital - meaning us.

Lee's tried in the past to entice votes to tax themselves to help the hospital - the most recent attempt was the Trauma Tax - but voters have always said, "No."

It may have been the competition that spurred HCA into selling and Lee Healthcare into buying.

That happened last Oct. 1 after five months of secret negotiations when hospital board members were kept in the dark about the deal. So was the public and the media. (Lee's hospital board is elected - it's one of only three hospital boards in Florida that are, along with hospitals in Sarasota and Clewiston.)

An exemption to the state's Sunshine law allowed the public hospital to negotiate the purchase of a private facility in secrecy.

Ultimately, the talks produced a $535 million deal that gave the Lee Memorial system a virtual monopoly on health care in the county and created one of the 10 largest public hospital systems in the U.S. Only tiny Lehigh Regional Medical Center in Lehigh Acres is a health care option in Lee County.

Since then, hospital administrators have been busy melding two vastly different agencies into one efficient empire that includes: Cape Coral Hospital, Gulf Coast Hospital, HealthPark Medical Center, Lee Memorial Hospital, Southwest Florida Regional Medical Center, The Children's Hospital of SW Florida, and The Rehabilitation Hospital.

"It's going better and faster than I anticipated," said Marilyn Stout, a hospital board member and the board's treasurer.

The merger

This merger has been smooth compared to the 1996 merger with Cape Coral Hospital. Back then, employees, nervous over losing their jobs, picketed. The community worried that Lee would treat the Cape hospital as second-class.

This time Lee Memorial officials went straight to the public with an outreach program. It held community meetings, focus groups, met with editorial boards, brought providers together for roundtables, formed doctor's groups, and started health-care studies. Overall, there were 151 focus groups, four townhall meetings, and an internet survey.

That's led to a number of innovative programs, such as:

Mental heath care has been a major issue in Lee County since Charter Glade hospital closed in 2000 after its parent company ran into financial problems. That's left the county without a psychiatric hospital.

But Nathan said a firm called Reliant Heathcare LLC. has recently contracted with the hospital to provide mental health care. The company plans to apply for the permits needed to build a full-service psychiatric hospital within six months.

Expansion of the nursing education program at Edison College and Florida Gulf Coast University. The lack of qualified nurses in the Lee system has been a problem for years and was recently compounded when Lee administrators had to add nurses to the HCA hospitals to bring staff levels up to Lee standards.

This was done by hiring a number of traveling, or temporary, nurses until nursing school graduates can fill the gap.

EMS and emergency call initiatives have been established. Deciding on which hospital to send patients has become more tuned to the patients needs than by economics.

"We can send patients to the best place for the best care without the concern for competitive advantage," Nathan said.

The expansion of Gulf Coast hospital, to 345 beds for an estimated $285 million, is months ahead of schedule, officials said. When completed, the Lee system will have 1,560 beds or 62 beds more than Jackson Memorial Hospital in Miami, the state's largest public hospital.

Each individual hospital in the system now has an administrator. Prior to that, Nathan and a senior management group oversaw each facility.

Growing pains

But not all is rosy.

Some physicians are still troubled by the merger.

Dr. Peter Schrieiber, a physical medicine and rehabilitation specialist, said the Lee health system is unfairly competing with private entities.

"It looks like they're developing a monopoly with their home health and rehab facilities, directing their patients there. They're directly in competition with the community."

Others have said that it's tough to compete with doctors whose practices are owned by the health system. Sovereign immunity, which protects doctors from civil suit or criminal prosecution is only available to those doctors who are technically employees of the public hospital. That protection is not available to private physicians who can be targets for law suits and who must pay huge premiums for liability insurance.

Yet, Dr. John Donaldson, a pediatric ear, nose and throat specialist and chairman of the health system's board, said the doctors are talking.

"The dialogue is excellent," he said. "It's a cooperative effort. Without the doctors we wouldn't be where we are."

The physicians have also organized themselves into a group and are represented at board meetings and on committees such as education, finance and planning.

And the system's finances are not as robust as before.

Last year Lee made about $18 million but was expecting more than $40 million this year on a budget of nearly $1 billion. But a slower economy and unanticipated costs with the merger has fiscal managers looking at less, said John Weist, the system's chief financial officer.

How much less, Weist wouldn't estimate.

"We thought we could hold the line on staffing at HCA but we had to add additional staff," Weist said.

The system has already announced a 5-percent increase in hospital charges for the coming year, but Weist said that's been the norm for years.

The future

The Lee system still has a lot of decisions to make.

The past year has required hospital officials to merge the two hospitals, decide on common procedures, get medical records into one system, standardize treatment and figure out which floor wax to use.

In the next few months, the board will decide on what medical care will go primarily to what hospital, whether there will be a stand-alone children's hospital or a stand-alone cancer center, and which hospitals will be the primary heart facilities.

"The hospital stands on the brink of a major reorganization of how medical care is delivered in our area," Donaldson said.

One Year Later

Florida Weekly asked Lee Memorial Heath System to list its accomplishments in the past year since the purchase of the two HCA hospitals. Here is their response:

We hired everyone at the time of transition - no one lost their jobs.

We hired 91 bedside registered nurses for Southwest Florida Regional Medical Center and Gulf Coast Hospital to increase staffing levels.

We improved coordination of care. For example: new patient transfer policies among facilities, centralization of our heart monitoring telemetry systems, and creation of an electronic medical records system.

We shared best practices across the system and used what worked best. For example we took Southwest Florida Regional Medical Center's knowledge and used it to earn JCAHO (Joint Commission on Accreditation of Healthcare Organizations) stroke certification at the other LMHS hospitals.

We achieved a seamless integration of all insurance contracts without affecting any patient services and physician preferences, and without creating additional out-of-pocket expenses for patients.

We standardized our charges and our financial policies for charity care, discounts for prompt pay, registration and collections. We also expanded our discount policy for the uninsured.

We engaged over 4,000 individuals throughout the community to create a vision for improved health care over the next decade and identified eight areas of concern that we will help champion with the community

We never had an interruption of construction at the new hospital at Metro and Daniels. In fact, we are approximately 45 percentcompleteand four months ahead of schedule, and we upgraded the diagnostic technology in the construction plans to provide state of the art equipment for the region.

We created Chief Administrative Officers for each hospital and a Physician Leadership Council to strengthen communications among all facilities.

We created a process for dialogue between the Physician Leadership Council, Administration and our Board of Directors. The LMHS Board adopted a resolution declaring its unwavering commitment to the Medical Staffs. We had to add just one more- in our opinion, this is our proudest accomplishment.

Despite the changes during the past year, our annual employee opinion survey, conducted by an outside company in August 2007, showed that we scored better in every section that was surveyed. This was the first time that all 8,000 employees at all five hospitals and our other facilities took this survey together.