Tampa General to assume operations of DeSoto County’s lone hospital

Big changes are coming to the only hospital in rural DeSoto County. 

The public Desoto Memorial Hospital board voted unanimously on Monday to lease the 49-bed facility, based in Arcadia, to Tampa General Hospital for an investment of at least $45 million and rent of $10 per year. The lease will be for a period of 49 years.

The decision capped a day-long meeting in which directors heard presentations on three options for the hospital’s future. In accepting the TGH system’s plan, the board rejected proposals from AdventHealth, one of the nation’s ten largest health care systems, and NorthStar Hospitals, a health care management and investment company based in Massachusetts.

Board member Robert Heine, who made the motion to proceed with TGH’s proposal, said he preferred a lease to a sale of the hospital. “For that reason, I think that Tampa General can help this community the most,” he said.

Representatives from AdventHealth and NorthStar said during their presentations they were open to a long-term lease but the organizations originally proposed a purchase and a management services agreement, respectively.

The decision comes as the hospital faces challenges common to many rural facilities: rising labor and equipment costs; difficulty recruiting specialists; the loss of expertise as aging employees retire; and Medicare and Medicaid reimbursements that fall short of covering actual costs.

Hospital leaders said in previous meetings that DeSoto Memorial was not in danger of immediate bankruptcy but that changes were needed to sustain it for the future. The board issued a request for proposals for sale, lease or partnership in late June.

With the lease, the board hopes not only to retain but expand access to health care in DeSoto County by tapping into the resources and economies of scale at a larger system.

TGH representatives promised to pursue those goals.

“We believe that health care should be local,” said John Couris, president and CEO of Florida Health Sciences Center, the health system that includes TGH in partnership with University of South Florida. “We believe that programs and people living in communities like this should not have to travel 30, 40, 50 or 60 miles for the majority of the care that you provide.”

TGH itself is leased from Hillsborough County – an arrangement which began in the late 1990s, according to a hospital representative. The hospital system also took over three rural hospitals in Hernando and Citrus from a large for-profit healthcare chain in recent years, adding them to a portfolio of health care facilities in 150 locations across Florida.

New leaders vow to retain staff, improve services

Under the lease, TGH plans to retain all DeSoto Memorial employees in good standing, as well as senior management.

TGH leaders said that after the acquisition of hospitals in Hernando and Citrus counties, which are now collectively called TGH North, not only were employees retained, but the staff grew. 

“We’re not coming in here … for you to simply feed our other institutions,” said Couris. “We’re here because we want to invest.”

Part of that investment will go toward attracting specialists to expand care closer to home for DeSoto residents.

“We are prepared to move orthopedics in here as quickly as we can, because one of the things we’ll do with the transition is identify your biggest pain points, you tell us, and then address those pain points,” Couris said.

Steve Short, TGH’s executive vice president of strategic growth, emphasized that the $45 million TGH proposed for staffing improvements and upgrades to clinical equipment and the physical plant is a minimum investment. He said TGH would start by assessing needs and creating transition plans for upgrades and related staff training.

One priority will be the hospital’s electronic health records system. The current system won’t continue to be certified by its maker within a few years, according to DeSoto Memorial administrators. Dan Hogan, interim chief financial officer, said in October that upgrading to the next Meditech product will cost an extra $600,000 or more per year on top of the price the hospital currently pays.

TGH leaders also said they would relocate a helicopter to DeSoto Memorial to facilitate hospital transfers.

Board member Ernest Hewett asked what would happen for patients who prefer to transfer to Sarasota instead of Tampa when needed. 

“At the end of the day, it’s the patient’s decision,” said Couris. “We will never force a transfer to TGH if the patient, or the doctor, for a legitimate reason, doesn’t want to come, or if they’re established already with somebody [at Sarasota Memorial].”

Next steps: Finite details and future meeting

DeSoto Memorial’s attorney now will negotiate details of an agreement with TGH. The board could still pull out if the final details are not in the best interest of the community, according to David Davidson, the hospital’s legal counsel.

Under state law governing the lease or sale of a public hospital, the new managing organization must commit to continuing health care services at the same quality of care, including providing care to those who can’t afford it.

The board also must hold another meeting to allow public comments on the planned lease and petition the Agency for Health Care Administration for approval of the deal.