FREQUENTLY ASKED QUESTIONS
BENEFIT OF TRANSITIONING TO A COMMUNITY NOT-FOR-PROFIT
Q.
A.
What is the benefit of transitioning to management by a community not-for-profit
corporation?
Under management of a community not-for-profit corporation Broward Health will provide
greater flexibility to face forthcoming challenges and opportunities. Healthcare reform
ushers in a future in which there may be less need for tax revenues to fund care for the less
fortunate at the same time that more competitors will be vying for the business of the newly
insured population.
Furthermore, as a community entity Broward Health will be able to pursue additional
opportunities, such as joint ventures and expansion of services, that will clearly allow the
institution to generate incremental funds to help meet the financial burden of delivering
care to indigent patients over and above what tax revenues currently support.
Q.
A.
What could Broward Health do under the proposed structure that it cannot do now?
Florida law and its constitution greatly limit the types of business ventures that public
hospital systems can pursue. For example, Broward Health is constitutionally precluded
from entering into a joint venture with a private enterprise. Our public charter also sets
strict boundaries to where we can locate our healthcare facilities. Under management of a
community not-for-profit corporation, Broward Health would have much greater flexibility
to face forthcoming challenges and opportunities presented by healthcare reform.
Q.
Why is the transition to a community not-for-profit entity the best solution to address
healthcare reform?
Federal healthcare reform encourages the formation of certain ventures that the hospital
system is not allowed to enter into under the current public structure. For example, the
reform authorizes Medicare to contract with Accountable Care Organizations, which are
networks of physicians and other providers that could work together to improve the quality
of healthcare services and reduce costs for patients. Under its current structure, Broward
Health is constitutionally prevented from forming joint ventures with physicians to create
such an Accountable Care Organization.
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Q.
A.
How will this change benefit the residents of Broward County?
Transitioning to a community not-for-profit corporation puts Broward Health in a stronger
and more flexible position to compete in the face of impending changes in our operating
environment brought about by federal healthcare reform. As we increase our capabilities of
competing for the business of paying patients, we will be in a better position to meet the
financial burden of delivering care to indigent patients over and above what tax revenues
currently support, and potentially even reduce the tax revenue burden on the NBHD.
Q.
Why is it important that Broward Health be competitive in serving the needs of both
paying and indigent patients?
A study commissioned by the Henry J. Kaiser Foundation in 1999 of more than 25 hospital
conversions in the period from 1985 to 1995 concluded that business practices that better
enable institutions with a public mission to attract a base of paying patients also enable
them to continue serving vulnerable populations. If Broward Health is successful in
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competing for the business of paying patients, the system will be in a better position to meet
the financial burden of delivering care to indigent patients over and above what tax
revenues currently support, and potentially even reduce the tax revenue burden on the
NBHD.
Q.
A.
What role will the NBHD play in the management of the hospital system?
Since a formal lease proposal has not been structured, it is premature to address the
question of NBHD management oversight of the new not-for-profit entity.
Q.
A.
Will the NBHD cease to exist?
No. The North Broward Hospital District and its Board of Commissioners will continue to
exist and preserve their authority to collect taxes in order to provide care for indigent
patients. The new community not-for-profit corporation would manage and operate the
healthcare system and would have greater flexibility to face forthcoming challenges and
opportunities brought about by impending changes in our operating environment that
result from federal healthcare reform.
Q.
A.
Is Broward Health making this change to avoid being subject to the Sunshine Law?
No. We are proposing this change because under management of a community not-forprofit corporation Broward Health will have greater flexibility to face forthcoming
challenges and opportunities brought about by federal healthcare reform. Furthermore, as a
community entity Broward Health will be able to pursue additional opportunities that will
clearly allow the institution to generate incremental funds to help meet the financial burden
of delivering care to indigent patients over and above what tax revenues currently support.
Not having to publicly divulge our strategies to potential competitors may be a side benefit
of having private management, but not a determining factor.
IMPACT ON EMPLOYEES, DOCTORS, PATIENTS AND FACILITIES
Employees
Q.
A.
Will any employees be laid off during the conversion?
No workforce reductions are contemplated as part of the conversion plan to a community
not-for-profit structure. In fact, the transition to the new corporation would be seamless
and barely noticeable to current employees of Broward Health, doctors affiliated with the
system and the patients we serve. We are able to provide our patients top quality
healthcare service on account of the skills and dedication of our workforce and doctors, and
value their individual and collective contributions.
Q.
Will employees lose any of their workplace benefits? Will employee pension plans be
impacted by the change?
Protecting workplace benefits is a major factor in our decision. Rest assured that we will
explore every possible option so that employees continue to receive the same workplace
benefits they have enjoyed to date.
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Regarding pensions, the transition does not change the pension or the Rule of 80. Please
also keep in mind that, regardless of the transition, we are always reevaluating our pension
plans and benefits packages, to examine issues, investment options and risks, and other
potential guidelines as needed.
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We want the transition to the new corporation to be seamless and barely noticeable to
current employees of Broward Health, doctors affiliated with the system and the patients
we serve.
Q.
A.
Will the transition allow Broward Health to enter into new ventures with doctors?
The community not-for-profit structure will allow for greater flexibility in terms of the
types of joint ventures and agreements that we may be able to enter into with doctors, but it
is premature at this stage to speculate on what the specifics of those agreements might be.
Q.
A.
Does the plan call for the closing of any of the system’s healthcare facilities?
No. The transition to the new corporation would be seamless and barely noticeable to
current employees of Broward Health, doctors affiliated with the system and the patients
we serve. Broward Health will remain committed to its public service mission, even as it
transitions to a community not-for-profit corporation.
Q.
A.
Will the leadership of Broward Health remain in place?
As part of the conversion, Broward Health daily operations and management transfer over
to the newly created community not-for-profit corporation. The current management
structure that operates Broward Health will report to the board of the 501(c)(3) community
system.
Q.
A.
How does the proposal affect CDTC – Children‘s Diagnostic and Treatment Center?
This does not affect the Children‘s Diagnostic and Treatment Center. They are already a
501(c)(3) corporation, similarly to the Broward Health Foundation.
Physicians
Q.
A.
Will the physicians that are employed by the hospital lose sovereign immunity?
The Florida law identifies certain requirements that would allow the hospital system to
retain sovereign immunity even if it is managed and operated by a community not-forprofit. We understand that sovereign immunity is an important benefit of the current
ownership model of the hospital system and during the course of the due diligence process
will evaluate how we can aim to preserve sovereign immunity without having to give up the
management flexibility that makes this venture worthwhile in the long run.
Of all the hospital systems in Florida that have undergone these types of transitions, some
have structured the lease in a way that it preserves sovereign immunity and others have
decided to move ahead without it.
Q.
A.
Will representatives of the medical staff sit on the board of the new corporation?
The new board will consist of 15-20 members who will be identified from among prominent
community, business and medical leaders.
Q.
Will the interests of physicians be considered at the time of making the final
proposal? Will this proposal allow for ACO relationships?
As part of the due diligence process, the Board of Commissioners will solicit feedback from
all key stakeholders in the hospital system. Some ACOs (Accountable Care Organizations)
are considered joint ventures and under its current state-run model Broward Health would
be constitutionally prevented from entering into that type of ACO agreement with doctors.
The proposed change to management of the operations by a not-for-profit corporation
would make it possible for Broward Health to enter into ACO agreements even if they entail
a joint venture.
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Facilities
Q.
A.
Can other institutions have access to the tax revenues that fund indigent care?
The tax funds are controlled by the NBHD. As in similar transitions before this one, we
expect that the terms of the lease agreement would include continued access to the tax
revenues that are collected for the purpose of funding indigent care in exchange for a
commitment from the community not-for-profit corporation to continue delivering those
services to the uninsured. However, one of our goals is that over time we can reduce or even
eliminate the need to collect tax revenues to fund that care.
Q.
What will change about community health services and does their
mission/philosophy change?
Community Health Services will not be affected. The Community Health Services mission
and philosophy remains the same.
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IMPACT ON THE INDIGENT POPULATION AND TAX LEVIES
Q.
A.
Will the hospital system continue to provide care to indigent patients in the same
volume as it has in the past?
Yes. The volume of our services, level of care and the quality of care would remain the same.
We are committed to our mission of providing quality care to all the people we serve.
The lease agreement proposal that is presented to the Board of Commissioners for approval
will include a provision for the continued treatment of indigent patients as required by
Florida law. As more patients are shifted to medical insurance plans as a result of federal
healthcare reform and Broward Health is able to generate other sources of income under
the new structure, we will be able to continue fulfilling our indigent care giving mission
while at the same time seeking to reduce our dependence on tax revenues.
Q.
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Q.
A.
What safeguards will be put in place to ensure that the level of care for indigent
patients does not diminish?
We can assure you that any lease agreement that is eventually voted on by the Commission
will include provisions for the continued treatment of indigent patients as required by
Florida law.
Why is it important that the hospital serve paying patients in addition to uninsured
patients?
Tax revenues represent approximately ten percent (10%) of the NBHD’s overall budget and
do not currently cover all costs associated with meeting the healthcare needs of the indigent
patients served by the system. By serving paying patients, Broward Health can generate
surplus funds that supplement tax receipts and go towards supporting our indigent care
giving mission. Furthermore, having a broader patient base allows us to invest in assets and
resources that are available for the benefit of all our patients. A community not-for-profit
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management structure will give Broward Health greater flexibility to compete for the
business of these valuable paying patients.
PRECEDENT
Q.
A.
Is this change permitted under Florida law?
Section 155.40, F.S., was enacted by the Florida legislature in 1982 in order to authorize the
leasing of public hospitals to not-for-profit entities to allow them to compete with for-profit
hospitals while continuing to provide citizens with quality healthcare. Under such a lease
agreement the not-for-profit corporation would have greater flexibility to enter into
business ventures that would normally not be allowed for a public hospital system. Section
155.40, F.S., has been amended multiple times since it was initially enacted, and each
amendment has made the conversion process more accessible to public hospitals.
Q.
A.
Why propose this change if Broward Health is in good financial shape?
The Board and leadership of the hospital system believe that now is the best time to address
this change, taking advantage of the system’s solid financial standing and in order to give
leadership enough lead time to address potential opportunities prior to the full impact of
federal reform taking effect in 2014. Furthermore, the experience of other hospital systems
that converted to this model shows that they were able to continue meeting the needs of the
indigent patients in their communities while expanding services to other paying patients.
Q.
A.
Has this been done before by other hospitals?
There are numerous examples in Florida for these types of lease agreements between a
public hospital system and community not-for-profit entities, and they have generally
resulted in successful transitions without affecting the hospitals’ commitment to providing
care to indigent patients in those communities. In fact, more than 20 such transitions have
been completed in the state to date – including Shands and Tampa General.
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