The Value of a Public Hospital
Public hospitals have been in the news a great deal since Florida Gov. Rick Scott appointed a special commission to review taxpayer-funded hospital districts in 2011. According to the governor’s office, “the commission will consider whether government-run hospitals are in the best interest of taxpayers and recommend a cost-effective and efficient model for providing Florida with a health care safety net.”
This type of scrutiny is familiar to Sarasota Memorial, which is continually required to demonstrate its value and fiscal responsibility to the community and taxpayers. The organization’s work is open to the public, by law.
Most experts agree that it is difficult -- if not impossible -- to make statewide generalizations about Florida’s government-run hospitals. While safety-net hospitals provide the majority of Medicaid and uninsured care to their communities, each district has different government, taxing and management structures based on the individual needs of their communities. For example, SMHCS has an independent, unpaid, elected Hospital Board accountable to local voters.
The commission, which did not include any representatives from safety net hospitals, concluded its work at the end of 2011. The group’s report contained positive findings about public hospitals, including:
The report had no finding that public hospitals are inefficient, wasteful or have an unfair competitive advantage. There also was no finding that public hospitals have outlived their usefulness.
You’ll find additional information about the governor’s commission and Sarasota Memorial in recent editorials in local newspapers:
http://www.heraldtribune.com/article/20111016/OPINION/111019733
http://www.heraldtribune.com/article/20111130/OPINION/111129537
http://www.heraldtribune.com/article/20111229/ARCHIVES/112291036
http://www.heraldtribune.com/article/20111231/COLUMNIST/111239964/-1/news?p=all&tc=pgall
A number of community members have expressed concern that some of the top-down, statewide mandates recommended by the commission will hamper the ability of Sarasota Memorial to deliver essential medical services to our community and devote scarce resources to where they are needed most.
For those who may not be familiar with Sarasota Memorial, here are some frequently asked questions about the organization’s governance, taxing authority, services and more.
Q: Who oversees Sarasota Memorial?
Q: How and why does the hospital levy taxes?
Q: Has the decades-old hospital district adapted to meet community needs?
Q: What is the projected impact of a measure that would subject the district to “sunsetting” reviews?
Q: What is the projected impact of the recommendation to turn hospital districts into “indigent care” districts?
Q: How does SMH improve access to care for the uninsured and underinsured?
Q: Who oversees Sarasota Memorial? back to questions
Sarasota Memorial is owned and operated by the Sarasota County Public Hospital District, a special, independent taxing authority created by the Florida Legislature in 1949. The district’s boundaries mirror those of Sarasota County.
Sarasota County voters decide who runs the health system. The district is governed by the Sarasota County Public Hospital Board, made up of nine elected, unpaid citizens who represent specific areas of the community as well as the district as a whole.
The only public hospital in Sarasota County (as well as the surrounding Manatee, Desoto and Charlotte counties), the health system operates with full transparency and accountability.
The Hospital Board complies with laws and regulations governing the hospital and elected officials, including Florida’s Government in the Sunshine and Public Records Act and the Florida Code of Ethics for Public Officers and Employees, to name a few. Upon election, board members receive extensive orientation from legal counsel and subject matter experts in these laws, as well as topics including finance, quality, audit, governance, corporate compliance and human resources.
The Sarasota County Public Hospital District has no history of violations of, or non-compliance with, its governing documents or government-in-the-sunshine laws.
The Board encourages community participation in the governance of the district to ensure that Sarasota Memorial continues to serve the needs of all of the citizens of Sarasota County.
For more information about the Hospital Board, including profiles of board members, please click here.
Q: How and why does the hospital levy taxes? back to questions
Charged with serving as a good steward of scarce financial resources, the Hospital Board derives its authority to levy ad valorem property taxes from enabling legislation passed by the Florida Legislature and approved at a referendum by Sarasota County voters.
The Board sets the annual tax rate in a fully transparent process that includes a newspaper advertisement of the proposed tax rate and two public hearings (also advertised in the local newspaper) where the public may provide comments before the board votes on the final tax rate. The District’s current levy is 1.08 mills, just over ½ of its 2 mill authority.
To ensure the District continues to meet the ever-shifting health needs of the entire community, the enabling legislation does not specify that tax revenue must be allocated to one particular program or demographic. Rather, the district is empowered to levy taxes of up to 2 mills for valid discretionary purposes that include:
• payment of operating expenses, debt service and capital expenditures,
• to establish, construct, acquire, operate and maintain hospitals and health care facilities for limited or extended care and treatment and any facilities that are necessary and incidental to providing care to the community.
To that end, the Hospital Board has made an ongoing commitment to serve as the region's leader in the provision of top-quality health care and the most sophisticated treatments and technology. For instance, the hospital was one of the early leaders in the implementation of the Electronic Medical Record, rolling out the technology in 1998, and was the first in the region to launch a robotic surgery program and patient simulation training lab.
The hospital also remains committed to its safety-net mission of providing care to all who need it, regardless of their ability to pay, providing a wide range of programs and services to the under-insured and uninsured.
Q: Has the decades-old hospital district adapted to meet community needs? back to questions
The Sarasota County Public Hospital District has changed with the times and the community to ensure that it continues to meet the needs of its citizens. Since the district was authorized in 1949, its enabling legislation has been amended 30 times, most recently in 2005, at the request of local legislators. The organization is a continually evolving entity that responds to the demands of community members.
Today, Sarasota Memorial Health Care System is an 806-bed medical center and the region's second-largest employer with a 4,000-strong workforce and more than 738,000 patient visits a year.
Earnings are re-invested in patient care for our community, allowing Sarasota Memorial to serve as the region's health-care safety net while providing advanced treatments and technology. For example, the revenues SMHCS has saved are paying for our $250 million campus improvement project, including our replacement bed tower. The hospital is accountable to local taxpayers and the community.
In addition, the organization has been recognized repeatedly over the years as one of the nation's best, with superior patient outcomes and a complete continuum of care: Sarasota Memorial is the only hospital in southwest Florida named in the nation’s top 1% of hospitals for consistent clinical excellence, according to HealthGrades, an independent health care ratings organization. Sarasota Memorial also is the only hospital in the region with Magnet Nursing Services Recognition, the nation’s highest honor for excellence in nursing.
Q: What is the projected impact of a measure that would subject the district to “sunsetting” reviews? back to questions
Measures that would terminate hospital districts’ taxing authority every 8 - 12 years unless voters re-approve it will have a devastating impact on Sarasota Memorial’s ability to finance vital patient care improvement programs and operations. Such legislation would make it difficult, if not impossible, to borrow funds to pay for needed projects such as our new bed tower, which is replacing 1960s-era facilities. Bond ratings would be negatively affected, which would increase our cost of borrowing funds and adversely impact our existing bondholders.
In addition, the elected members of the Sarasota hospital board serve staggered four-year terms, so voters have the opportunity to determine the direction of SMHCS by selecting board members in elections every two years. Also, community members may offer input at public hearings before the district’s property tax rate is approved each year.
Q: What is the projected impact of the recommendation to turn hospital districts into “indigent care” districts? back to questions
Perhaps the Sarasota Herald-Tribune said it best in its Dec. 29, 2011 editorial: “This recommendation could severely limit the ability of public hospitals and districts to invest -- based on local needs -- in facilities and services that benefit all taxpayers, residents and businesses.” The newspaper cited the hospital’s freestanding Emergency Room in North Port and efforts to enhance primary care as examples of programs made possible by the district’s current structure. The newspaper noted “the provision of additional services and cost-effective care could be set back, rather than promoted, by a statewide policy limiting the use of local taxes.”
Several other counties that have indigent care funds now face shortfalls or other issues. In a Jan. 5 article, the Herald-Tribune said, “The model for privatizing a public hospital and using proceeds from the sale to create a trust fund for indigent care seems to be Manatee County’s sale of Manatee Memorial Hospital in 1984, even though that fund is now on the edge of insolvency.”
Q: How does SMH improve access to care for all who need it? back to questions
Sarasota Memorial is the health-care safety net for our community. The hospital treats nearly 90 percent of Sarasota County’s hospital Medicaid cases and nearly 60 percent of self-paying cases.
Sarasota Memorial has a long history of developing and maintaining programs that ensure the broadest number of low-income community members have access to the full complement of inpatient and outpatient care, from disease management to the most advanced diagnostic, surgical techniques and specialty care available.
As private hospitals have eliminated services over the years or chosen not to offer essential programs, Sarasota Memorial has worked to provide necessary services to all who need them.
Examples of the hospital’s efforts to ensure access to care include the following:
• Sarasota Memorial operates a Community Medical Clinic, which provides a wide range of free diagnostic, specialty and surgical care to uninsured or underinsured patients "beyond the hospital's walls." One of only a few of its kind in the nation, the clinic improves access to essential care in partnership with other area health providers. Patients must prove Sarasota County residency and have a household income at or below 200 percent of the Federal Poverty Level. With the economic downturn and growth in unemployment, more people than ever are turning to the clinic for necessary specialty care. In just three years, the clinic has seen a 49 percent increase in its patient volumes, from 4,086 in 2007 to 6,105 in 2010.
• Sarasota Memorial is the only hospital in the county delivering babies and providing neonatal intensive care -- well over half of the hospital’s obstetrics and NICU patients are on Medicaid or uninsured/underinsured. Recognizing the necessity of providing high-quality care to local women with high-risk pregnancies, Sarasota Memorial also funds the county's only providers of Perinatology care. The hospital also has the only inpatient Pediatrics unit in Sarasota County.
• Sarasota Memorial is the only hospital in the county providing the full array of inpatient/outpatient psychiatric services to patients of all ages, expanding an already unprofitable program to meet community needs since other providers have limited their services. It is the only hospital in Sarasota County with a designated Baker Act receiving facility for non-voluntary patients, including those with medical issues and the frail elderly. SMH also is the sole inpatient provider of psychiatric health care to adolescents and children.
• The hospital provides the community’s largest and most comprehensive spectrum of emergency specialty care available 24 hours a day, 7 days a week, 52 weeks a year. Nearly half of the patient visits to the main hospital Emergency Care Center and the freestanding Emergency Room in North Port are Medicaid or self-pay/uninsured. Sarasota Memorial has been the only hospital to make a significant investment in the medically underserved community of North Port.
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