Sarasota Memorial-BayCare Health System Strategic Alliance
Frequently Asked Questions, April 2013
Q: What is the relationship between Sarasota Memorial Health Care System (SMHCS) and BayCare Health System?
A: On Dec. 17, 2012, the Sarasota County Public Hospital Board voted to enter into a 5-year strategic alliance with the not-for-profit BayCare Health System to help secure a strong future for SMHCS – Sarasota County’s only public and only not-for-profit health system – and the community it serves.
Under the agreement, which took effect in January 2013, SMHCS and BayCare leadership teams are working together – using their combined resources and expertise – to manage the alliance of the two strong systems.
Q: How will the strategic alliance benefit our community?
A: High quality patient care is paramount and the number one priority of both systems. Through this agreement, SMHCS and BayCare are sharing best practices and expanding resources to help support our collective missions during a period of profound change in healthcare delivery.
In short, the strategic move allows SMHCS to take advantage of economies of scale and provide more cost-effective health care services through shared resources and greater leverage in negotiating contracts and the purchase of supplies. The alliance also allows SMHCS to provide a broader range and enhanced level of care by collaborating on clinical quality, acquisition of new technology, medical research and education, business management, strategic planning and operational efficiencies.
Q: Is the agreement with BayCare a merger or privatization?
A: No. The new arrangement did not involve a sale, lease, merger, acquisition or transfer of assets. SMHCS retains its status as an independent public hospital and will continue to be governed by its 9-member elected Hospital Board. The hospital and network of physician offices, ambulatory services and outpatient facilities will continue to operate for the benefit of Sarasota County citizens.
Q: What prompted the need for a strategic alliance? Was it financial reasons or a result of healthcare reform?
A: The strategic alliance is the result of nearly three years of research and planning by SMHCS senior leaders and the Hospital Board as they sought ways to protect the health system from the financial impact of reforms transforming the health care industry.
While SMHCS is financially strong, the strength of collaboration will help contain costs to offset the significant reductions expected in the years ahead.
Q: Why did the Hospital Board choose BayCare for its partner?
A: Sarasota Memorial’s strong financial performance made this an ideal time to proactively seek opportunities to enhance healthcare services for our region. In reviewing potential partners and options, the Board chose BayCare because it is a strong community health system with the same not-for-profit mission as Sarasota Memorial.
Composed of 10 (soon to be 12) not-for-profit hospitals, outpatient facilities and services such as imaging, lab, behavioral health and home health care, BayCare is the leading community-based health system in the Tampa Bay area. Its family of hospitals include: Mease Countryside, Mease Dunedin, Morton Plant, Morton Plant North Bay, St. Anthony’s, St. Joseph’s, St. Joseph’s Children’s, St. Joseph’s Hospital-North, St. Joseph’s Women’s, South Florida Baptist, St. Joseph’s South (under construction) and Winter Haven Hospital (being acquired)
Q: How will this agreement affect my doctor(s)? Will some patients be sent to BayCare facilities for their care?
A: Most of the changes will take place on the administrative side – patients won’t see much of a difference (no change in name, identity or mission). The structure of our medical staff will not change, and there is no expectation that patients be referred outside of the SMHCS system.
Decisions regarding medical care are always made by individual patients, based on consultation with their physicians and what is best for their medical condition and personal situations.
Q: What role does the Sarasota Memorial Public Hospital Board play in the governance of the local health system, and who runs the day-to-day operations?
A: The Sarasota County Public Hospital Board continues to function in the same capacity it always has. Ownership and governance of SMHCS has not changed, and the elected board retains authority and oversight over SMHCS’ strategic plan, CEO and operations of the district, including creation or termination of any services.
The same executive team which managed SMHCS prior to the alliance (CEO Gwen MacKenzie, COO David Verinder, and CFO Bill Woeltjen) continues to oversee current day-to-day operations. They have the same responsibilities as before, but report to the BayCare executive team as well as the Hospital Board.
Q: Currently Sarasota Memorial receives financial support from local tax revenues. Will those tax dollars be used to support BayCare operations?
A: No. Tax dollars make up less than 7 percent of SMHCS’ total revenue (enough to cover roughly 28 days of annual operating expenses.)The Hospital District’s Charter ensures that those dollars are spent only on services and facilities operated by SMHCS in Sarasota County.
The alliance is expected to bolster SMHCS’ financial performance so that reliance on taxes remains low. Though tax revenue has declined 28% since fiscal 2007, SMHCS’ obligations as a health care safety net for uninsured and indigent residents continue to rise. In 2012, SMHCS collected $41 million in tax revenue while providing nearly $85 million in community programs and caring for the majority of Sarasota County’s Medicaid hospital cases and uninsured. SMHCS also is the county’s sole provider of essential services such as obstetrics, neonatal intensive care & pediatrics, as well as psychiatric care for patients of all ages.
The alliance with BayCare will help SMHCS continue to deliver high quality care while staying fully committed to its role as the safety net for the people of this region.
Q: What happens after the 5-year contract ends, or if the alliance fails to achieve expected results?
A: If the partnership does not yield expected benefits, including at least a $10 million annualized return by end of year three, the agreement includes a clause that allows the Hospital Board to terminate the alliance after five years; if successful, however, the contract includes an option to renew for an additional five years.