Lee Health moves a step closer to private nonprofit conversion - Gulfshore Business (2024)

Lee Health is one step closer to converting to a private nonprofit business structure following a 9-1 board vote at a special meeting June 13 to proceed with the change. The Lee County Board of County Commissioners will formally decide on the matter within 120 days.

The Lee Health board of directors approved the resolution in a one-hour public meeting that saw sparse attendance, with four speakers registered for the opportunity to offer public input.

The vote followed months of preparation by Lee Health administration, which maintains that the conversion is necessary to help the system compete on a level playing field as the health care landscape continues to change in Southwest Florida and across the country.

A conversion would allow the system to expand services beyond Lee County, among other things, to better serve patients in the region. The system also maintains it would continue to fulfill its safety net mission to provide care to the uninsured and others unable to pay. Lee Health, with a current operating budget of $3 billion, provided more than $180 million in charity care/community benefit in 2023.

The option to change the business structure from a public nonprofit to a private nonprofit was made possible by state legislation in 2023 that enabled the health district—which does not have taxing authority—to explore it.

Public comments, ongoing concerns

The speakers who had registered prior to the meeting for public comment offered feedback ranging from positive to skeptical.

One of the speakers, Rev. William Glover, senior pastor of Mount Hermon Church in Fort Myers and president of the Interdenominational Ministerial Alliance, told the board he had been assured in meetings with Lee Health President and CEO Dr. Larry Antonucci and his leadership team “that Lee Health is committed to providing charity care and maintaining its safety net mission of caring for the most vulnerable in our communities regardless of their ability to pay.”

“I’m here because I also agree that it is important that our health system have local control to ensure its success and that it is not sold to an outside organization,” Glover said. “In short, I believe the conversion will enhance the ability to have a productive partnership with Lee County and all its residents and continue its nonprofit mission in the community by working with schools, housing departments, veteran services and more.”

Longtime local internist Dr. Raymond Kordonowy remains concerned about what he sees as the board’s failure to provide a full audit and valuation of the system’s assets. This spring, Kordonowy submitted a petition to the board requesting such an audit.

“I don’t think we can make decisions about what we’re going to do here in fairness to the public without telling them what is owned, what’s about to be transferred fully to a new entity, an entity that will be a private not-for-profit,” Kordonowy said. “I started a petition, and we know we have at least 117 signatures and probably more now. I presented that to the board earlier, stating that there is an interest by the public to have this done.”

In an interview following the board meeting, Kordonowy said he now intends to bring his petition to the Lee County Commission as they deliberate next steps, since he said the legislation that enables the potential conversion also requires the type of audit he is requesting.

Longtime Lee County educator and community watchdog Steve Maxwell spoke at the board meeting and said he also intends to continue exploring a petition to the Lee County Commission, either requesting a public referendum on the issue or a petition rejecting the proposed conversion as set forth in the board’s resolution.

Comments from the board

After a motion by board member David Collins and a second by Diane Champion, board chair Donna Clarke offered members the opportunity to offer comments prior to the vote, with only Dr. Stephen R. Brown and Therese Everly choosing to make remarks.

Brown said he had been “up and down about which direction we should take… I just think that this is the way to go and I approve this motion.”

Everly, who cast the single dissenting vote, said in a prepared statement that she continues to have concerns about key issues, including the safety net provision, loss of sovereign immunity and the possible impact on physician recruitment, short-term loss of supplemental government payments and refinancing of current debt.

“There are still, in my mind, significant unknowns to these strategies. I recognize 120 days is a significantly tight timeline to accomplish a fully vetted strategic plan,” Everly said. “We have been provided tools in the toolkit to possibly convert to a private entity, enter into joint ventures and other business models. We have the ability now to modernize our management of our investment portfolio and even sell the system if a very, very drastic measure would ever be needed.

“In the best interest of the people of Lee County, we have the flexibility to determine our future due to the Florida Legislature, and we are grateful for that. This is not a one-and-done or a once-in-a-lifetime opportunity. It is a tool in the toolkit that can be utilized at any point in the future. At this time, based on the information I have received, I unfortunately will not be able to support this resolution.”

What happens next?

With the Lee Health board approving the conversion resolution, the system will now work with the Lee County Commission over the next 120 days to finalize an agreement on how the new structure would work.

Antonucci said the system will now work with the county on issues, including an enforceable agreement for the continuation of safety net services in perpetuity.

“In addition, we will be working together to establish an oversight committee that we’re proposing would report to the county commission on a yearly basis to make sure that we’re living up to our commitments in the enforceable agreement,” he said. “There will also be some work with regard to drawing down our governmental transfers, which are supplemental payments on the Medicaid program. A governmental entity needs to do that. And of course, as a public entity we’re able to do that ourselves, but if we do convert, we will need a governmental entity to do that.”

Antonucci said that after those main negotiating points are worked out between the health system and the county, at the end of 120 days county commissioners would be required to vote.

“The county would have to vote with a majority to agree to the terms and our Lee Health board would have to vote in a super majority to agree to the terms,” Antonucci said. “That would mean seven out of 10 board members would have to agree. And if that happens, the district would be dissolved, and the new entity would move forward.”