Shands Lake Shore 'On the Rocks' – Gov's Lake Shore Hospital Authority Board – 'Silence'
Posted May 29, 2020 08:55 am
Photo by Kristina Flour/Unsplash | Observer
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COLUMBIA COUNTY, FL – Just short of 10 years after the 'sweetheart' deal between the Governor's Board at the Lake Shore Hospital Authority and the then Hospital Management Associates (HMA), now CHS, Shand's Lake Shore Hospital is 'on the rocks.' On Wednesday evening, like a bunch of mobsters bound to the Code of Omerta, not one board member mentioned the discussions they were having with the CHS brass, who want out of its lease with the Authority.
Background
In 1940 the population of Lake City was 5,836. During World War II, a number of institutions were established to help with the war effort. The Lake Shore Hospital was dedicated in 1940 to provide medical care for those in the Lake City area.
In 1955 the Lake Shore Hospital District was created.
On July 10, 1963, the Lake Shore Hospital Authority was established and is governed by a special act of Florida Legislature.
In 2005, the FL legislature rewrote the law and the Hospital Authority now operates under Chapter 2005-315.
The purpose of the Authority is spelled out in the legislation:"
(8)(a) To furnish temporary relief to the indigent of Columbia County and study the cause of their poverty; to seek a plan for their permanent rehabilitation; generally, to assist them to support themselves whenever possible to the end that they may cease to be a charge upon the community and, instead, become useful citizens thereof; and to bury the indigent dead of Columbia County and provide cemeteries for that purpose.
In 2010, the lease of the Authority was rewritten and reassigned from Shands (the big teaching hospital in Gainesville) to the soon to be Governor, Rick Scott's for profit Hospital Management Associates (HMA).
No one else had a shot at the deal. see: Lake Shore Hospital Authority Digs In – Competition Out
For a couple of years the deal seemed like a good one. The leased property went back on the tax rolls and big plans were afoot for the hospital.
However, lurking in the background was the mismanagement of the Hospital Authority and HMA, which was taken over by CHS. CHS over extended itself and its stock crashed and along with the plummeting stock price, the Authority client base shrank from over a thousand to at last count 137.
While this was going on, Richard Powell, the Authority's accountant-financial advisor-auditor (yes-all one person) was recommending taxing the community's residents at the max. While the rate was dropped a little bit by the Gov's. Authority Board, the Authority was sitting on a stash of cash of over $10 million and relief for the taxpayers was a pittance.
Wednesday, May 27, the Authority Board Meets
'Silencecio' was its game
After continued screw ups with the meeting notices, the Authority Board finally met virtually on May 27. To its credit, the Authority virtual meeting went flawlessly.
The day after the meeting, the local mainstream print media reported it had a conversation with Authority Manager and Florida legend and former 30 plus year Columbia County Manager Dale Williams.
The paper reported that Manager Williams said CHS wants out of it lease with the Authority.
Not one member of the Lake Shore Hospital Authority Board mentioned a single word during the meeting about the eminent demise of the Authority's relationship with CHS, even though there are 20 years left on the lease, which represents about $10 mil in rent.
Yesterday morning, your reporter interviewed a candid Manager Williams about the specifics.
Your reporter asked, "When was the first time that you found out that CHS wanted out of its lease?"
Manager Williams said that about a week ago he received a call from CHS officials, Craig Conti VP of Acquisitions and development and Terry Fowler, VP of Finance.
Manager Williams continued: they said they no longer had properties in the area; it was difficult to make the hospital profitable, they were looking for an exit strategy from the lease.
Manager Williams said, "We asked them to submit a proposal in writing."
At this point in the conversation, it wasn't clear who the "we" was. The board had not met and it is illegal to poll the board.
Your reporter followed up, "Did they say they would submit it in writing?"
Manager Williams answered, "Yes, they said they would send us a proposal."
There is no ETA for the proposal.
Manager Williams said, "We've been hearing comments out of the local hospital for months... Rhonda (Sherrod – former Lake Shore Chief) never said a word to us."
Manager Williams commented on CHS wanting out of its lease, "We never heard any of that from local people."
Hospital Occupancy Rate
What the Governor's Board Knew
Your reporter brought up the hospital census or occupancy rate, something which he has brought up at many meetings over the last year to blank stares from board members, one of whom is a doctor at the hospital.
Your reporter, "We've spoken about this before. Does the Hospital Authority have any idea what the average daily occupancy of the hospital is?"
Manager Williams answered, "The average in the past year, I think I was told 24. I need to verify."
Your reporter asked, "Did you discuss this with any of the board members?"
Manager Williams answered, "Terry Fowler came down last week and spoke individually with each trustee. He told them directly that they would like to set up an exit strategy... He asked them if they had any questions."
Your reporter asked, "So they all knew last night that CHS wanted out?"
Manager Williams answered, "Yes."
The Lease: 60% CHS – 40% Shands
Your reporter, "As you know, while CHS is 60% of the lease, Shands is 40%. If CHS walks, what about the other 40%?"
Manager Williams: "We were told by Mr. Fowler that whatever the final decision was they would 'deal with their partner.' CHS would deal with Shands regarding the settlement and those things. That would have to be approved by the trustees."
Your reporter asked, "Are they going to have to pay the Authority to get out of the lease? They have 20 years left."
There is no exit clause in the lease.
Manager Williams said that the 20 years liability translates into about $10 mil. The trustees will have to determine what a reasonable rate of return would be.
Your reporter summed it up, "So this is what we know. You spoke to CHS, the trustees spoke to CHS and nobody said a word at the meeting."
Manager Williams said, "That sounds about right."
CHS Leaves Employees in the Dark
The folks working at Shands at Lake Shore were mostly in the dark.
While no employees would go on the record, all the Observer spoke with said they hadn't heard a word about CHS wanting out of its lease and that the first time they heard about it was Thursday morning in the paper.
During the Wednesday evening Authority meeting, Shand's PR Gal Linda Silecchia was in attendance. When Chairman Beil asked if she had anything to report, she was silent about CHS and the future of the hospital and its employees.
Finally, Somebody Speaks Out
Over a year ago it was a big deal when School Board member and Nurse Practitioner Stephanie (Finell) Johns, became affiliated with Shands. Ms. Finell was highly regarded in the community and Shands CEO Rhonda Sherrod made the announcement during a LSHA board meeting to unanimous nods of approval.
On Tuesday, Ms. Finell closed her office, "They brought me in. They told me you and your staff are done. You're closed immediately. No notice to patients – no nothing," she said.
Your reporter asked, "Do you know if anybody is interested in the hospital?"
Ms. Finell answered, "Nobody wants it. They are sinking fast – been sinking for a while."
Your reporter asked, "Covid was the death knell for them?"
Ms. Finell answered, "Absolutely."
Your reporter asked, "Can I say that Stephanie Finell, as far as she knew, nobody at the hospital was ever told that they were closing?"
Ms. Finell answered, "Absolutely. We were never told. They still don't know. I knew it was coming – deep down inside."
Epilogue
It is clear, that members of Governor's Board, after their well orchestrated 'sub rosa' meetings with the brass from CHS knew Shands was 'on the rocks' and that this information was selectively leaked. It is not clear if one of them called the newspaper.
The board, or at least some of its members, clearly knew that the hospital occupancy rate for the 99 bed hospital was below 30 for quite some time, a money losing proposition in anybody's book.
June 8 is the next meeting of the Governor's Board. It will be interesting to see if it comes clean and lets the public, its neighbors, know what is going on.
