New Column: Hot Questions, Hot TopicsJun 28th, 2011 | By Submitted | Category: Editorials
By David Abercrombie, MCMH CEO
WHY DOES THE HOSPITAL HAVE TWO BOARDS?
When I first came to Madison five years ago, I was informed that the hospital had two boards -a hospital district board and a hospital corporate board. I have to admit that it confused me. No doubt it confuses many of you too. Now that I understand the reason, let me pass that understanding on to you.
Just to get our bearings, the name of the hospital district board is: Madison County Health and Hospital District. The name of the hospital corporation is: Madison County Health Systems, Inc. For clarity sake, I’ll call one, “the District” and I’ll call the other, “the Corporation.”
Before April 7, 1983 there was only one hospital board – “the District” board. The hospital district is a sub-unit of state government and its board at that time, as it still is today, was appointed by the governor of the state.
The Corporation didn’t yet exist. At that time, all employees of the hospital were District employees and because the hospital was (and is) a subunit of State government, it was required by State law to participate in the State of Florida Retirement System. The State Retirement System contributed 100% of all contributions to each employee’s retirement fund. This cost the Hospital District about a million dollars every year. Looking at this long-range, that means that it cost the District about $10,000,000 over ten years! A million dollars each and every year could be saved by spinning off a non-profit corporation and allowing this non-profit corporation to lease the hospital building and equipment, employ all the hospital employees, and operate the hospital.
The District would then confine its scope of duty to owning and leasing the building and other such property, and ensuring that the healthcare was properly attended to by the non-profit corporation. It was decided back then that the same people the governor appointed to the District board would also serve on the Corporate board. Because it is so obvious, you’ll likely never ask this, but for the sake of completeness let me say that the board members that serve today are not the same people that served in 1983; nor, for that matter is the District’s lawyer the same. The passage of thirty years brings a lot of changes. So…here we are thirty years later and the hospital has still has the two boards.
The question has got to be asked: Okay, is it still necessary to have two boards? The answer is: “yes.” The non-profit hospital corporation (not the District) was issued the State license to operate the hospital. The District does not have a license to operate the hospital.
It would seem like an easy matter to transfer the license, but nothing is ever seems easy. There are a couple of very major hurdles to this. First, if the license to operate the hospital is ever turned back to the State, then there is no guarantee that the State would re-issue another license to a different owner. Certain criteria would have to be met and it would take time, lots of it. Secondly, Medicare has a long process when it stops paying one hospital owner and starts making those payments to another owner (different owners with different license numbers effectively mean a different hospital).
This can take up to an additional year AFTER the new owner has received its new license. All payments from Medicare (about 52% of all money coming into the hospital comes from Medicare) would probably cease for probably about a year, or longer. So, there would probably be no hospital in Madison County for at least a three year span, if everything went right. Obviously, the hospital, as a continuing entity, couldn’t survive such an experience. This doesn’t even take into account that the current 130 hospital employees and the medical staff would be scattered to the wind. The hospital would probably never open again. The hurdles are just too great.
Then why not get rid of the District board and keep the Corporate board? This can’t be done either. First off, as was mentioned earlier in this article, the district is a subunit of State government (a Special Act codified by Chapter 2003-333, Laws of Florida). These board members serve at the pleasure of the governor. The citizens of a county can’t arbitrarily shut down a subunit of State government. Secondly, and this is important – the loan to build a new hospital is made to the District, not the Corporation. So, regarding the two Boards – it is what it is… at least for several years into the future.
This existing two-board structure actual works pretty well. If there is a problem, it seems to be in the form of confusion and misunderstanding. It has been said that the corporation was implemented to hide information regarding the hospital’s operation. That is not so. As a matter of fact, the board meetings of both, the District and the Corporate boards are held at the same sitting, one immediately following the other. Both meetings are open to the public. It has always been that way.
Everyone reading this has a blanket invitation to attend either, or both, meetings. Meetings are held the fourth Thursdays each month at 12 noon. As a way to make these meetings even more accessible, one meeting each quarter is held in communities other than Madison. For example, the meeting of June 23rd was held at Lee. So check your public notice postings to be sure of the time, date, and locations. They are subject to change from time to time.