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Tampa General Hospital at a crossroads; future to hinge on USF relationship

Tampa General Hospital on Davis Islands in Tampa is the primary teaching hospital of the University of South Florida.

SKIP O’ROURKE | Times (2007)

Tampa General Hospital on Davis Islands in Tampa is the primary teaching hospital of the University of South Florida.

TAMPA — You never know when you may need Tampa General Hospital. If you suffer terrible burns, survive a horrendous auto accident or need an organ transplant, it's where you'll go to get lifesaving treatment unavailable anywhere else in the area.

Last year, it was named the best hospital in Florida by U.S. News and World Report, earning national rankings in nine adult specialties. It's the primary teaching hospital of the University of South Florida, and a beloved Tampa institution both for its quality and its care for the poor.

Yet Tampa General finds itself at a crossroads as it works to plot its future at a time of change and uncertainty in health care. Hospital leaders just brought a new CEO on board who is well respected as a teaching hospital chief. They've also hired an outside consultant to evaluate what they vaguely describe as strategic alternatives.

Tampa General is about to become the last independent general hospital in the region. Might it join the others that have been sold or are joining large health corporations? Not necessarily, leaders say.

"We're not convinced that a standalone hospital cannot survive," said Tampa General board chairman David A. Straz Jr.

But maintaining independence doesn't mean continuing the status quo.

Tampa General's finances have steadied in recent months after a couple of rocky years. And its unique position in the market does insulate it from some of the competitive stresses that helped lead, for instance, St. Petersburg's Bayfront Medical Center to seek a deep-pocketed hospital chain to join. But outside experts and community leaders say the hospital's future depends on forging closer ties with an old, but fractious friend: the USF medical school.

USF Health, which has not had a teaching hospital since it was created nearly a half-century ago, trains more than 300 medical residents at Tampa General. Half of USF's doctors practice there, and those doctors see about half the patients at the hospital.

The two institutions have achieved a great deal together. And they've famously squabbled throughout their history.

Even Moody's Investors Services pointed out how much the hospital and the school need each other when it reported last month that it was upgrading Tampa General's financial status from negative to stable.

"It is unambiguously clear that both organizations are inextricably linked and need each other to serve their respective missions," the credit rating agency reported.

It pointed to Tampa General's status as the medical center for USF, coupled with its size and sophisticated services, as reasons to not be alarmed by recent weak financial performance.

But Moody's — and many others — have questions about the old friends.

"What the scope and tenor of the relationship will be is unknown at this time and is a credit uncertainty," Moody's noted.

• • •

Proponents of hospital consolidations say that size brings the bargaining power — and the range of patient services — needed to drive down costs and coordinate care.

Larger systems also are better able to weather hard times and absorb the costs of new equipment and innovations such as electronic medical records.

Cuts in government programs, the economic downturn, and an expensive conversion to electronic medical records have eroded the profits that Tampa General fought to achieve following years in near bankruptcy.

Total surgeries declined 4 percent in 2012, Moody's noted, while competition intensified in the local market.

Nearby St. Joseph's Hospital opened a satellite hospital in Lutz, with another under construction in south Hillsborough. The Adventist-owned Florida Hospital chain, which snapped up facilities around the bay area, opened another new hospital in the fast-growing suburbs of Wesley Chapel.

In 2012 and 2011, Tampa General's operating margins were less than 1 percent.

"We're a nonprofit and a hospital that's trying to serve the community's needs," said Straz, the board chairman. "We price our services accordingly. We don't price them to make a profit."

Still, as Moody's negative report indicated, the hospital was teetering, and had to take action. With the medical records project completed and efforts to reduce overtime and secure better discounts, the hospital is expecting a healthier, 2-percent margin.

Still, Gov. Rick Scott last week proposed more changes to the Medicaid program that would hit teaching hospitals like Tampa General especially hard. And if state Republicans refuse to accept billions in federal Medicaid expansion dollars, that too would be a blow.

• • •

The announcement this month of Tampa General's new CEO sent a strong message about its future. Jim Burkhart comes from University of Florida-affiliated Shands Jacksonville Medical Center, another non-profit teaching hospital with a strong reputation for quality and serving the poor.

Tampa General's future options may also be limited by its past. Opened as the 250-bed Tampa Municipal Hospital in 1927, it remained a public institution until fairly recently.

In the 1990s, community leaders were outraged by reports of secret negotiations to sell the still-public hospital to a for-profit hospital chain. In the lease agreement allowing it to become a private, not-for-profit institution, they insisted on protecting its historic mission.

As a result, Tampa General, which receives $3.5 million a year in county tax funds, must remain not-for-profit. It must care for the indigent and offer unique, complex and costly services, such as the burn unit and Level 1 trauma center. Changing any of that would require permission from the Hillsborough County Hospital Authority — and possible loss of public support.

"In an era where money is the bottom line and survival for hospitals, that's a tricky situation," acknowledged Pat Frank, a member of the hospital's board at the time who opposed it becoming a private institution.

But Frank, now Hillsborough's clerk of the circuit court, can't imagine giving up any more of the public's control over the hospital's future.

"This is public money that built that hospital and that maintains it."

• • •

So why all the fuss between Tampa General and USF?

At one time, private practice doctors feared university physicians would siphon away their patients. Tensions also have arisen over the differing missions of patient care, research and education.

Clashes of strong personalities also have erupted from time to time. Most recently, USF's latest medical school dean, Dr. Stephen Klasko, riled many in the medical establishment — including hospital retiring CEO Ron Hytoff — by saying people were leaving Tampa Bay to get top-tier care. After Klasko teamed with for-profit hospital chain HCA to open trauma centers, Tampa General joined a lawsuit against the state over the new centers.

Those were among the bigger headlines in a feud that even inspired Hillsborough County commissioners last month to officially ask the warring sides to make up.

"Everybody realizes that Tampa General is integral to the university, and the university is integral to Tampa General," said Dr. Bruce Zwiebel, Tampa General's chief of staff.

A radiologist in private practice who is also affiliated with the university, Zwiebel said the medical staff isn't the problem.

"There's a cooperative effort here on the part of physicians to take care of patients and not compromise patient care as a result of what team jersey you are wearing," he said.

Straz said he has been meeting privately with USF president Judy Genshaft since May to discuss "our partnership and its evolvement."

But their effort "hasn't gone anywhere up to this point," Straz said, declining to share specifics.

Genshaft did not respond to a request for comment.

Usually, the hospital and university sign multiyear affiliation agreements, even lasting up to a decade. This year's pact is just a one-year contract, officially because the hospital wanted its new CEO to be involved in the agreement.

Burkhart told the Times he wants very much to make the partnership work.

"I personally don't see anything where there's not a relationship between Tampa General and the University of South Florida," he said.

But strengthening that relationship is only a first step. "To think that either one of us can just sit back with the new health care environment and just stay the way we are is probably kidding ourselves," Burkhart added.

His counterpart at USF agreed the time is ripe for a breakthrough.

"It's to both of our advantages to look at things in a different way," Klasko said. "Our destinies are aligned, and the only thing that will make sense is for us to be stronger together."

Letitia Stein can be reached at lstein@tampabay.com or (727) 893-8330.

Tampa General Hospital

Beds: 1,018

Inpatient admissions: 44,989

ER visits: 82,844

Employees: More than 6,400

Operating revenue: About $1 billion

Operating margin (excess revenue over expenses from core patient care services): 0.6 percent

Medical residencies: more than 300 with the University of South Florida

Services offered that aren't available elsewhere in Tampa Bay: Level 1 trauma; burn unit; multiple organ transplants for adults

Nationally ranked medical specialities by U.S. News: cardiology and heart surgery; diabetes and endocrinology; ear, nose and throat; geriatrics; nephrology; neurology and neurosurgery; orthopedics; pulmonology; urology

Figures from fiscal year 2012.

Sources: Tampa General Hospital, Moody's Investors Services, Fitch Ratings, U.S. News & World Report

Tampa General Hospital at a crossroads; future to hinge on USF relationship 01/13/13 [Last modified: Monday, January 14, 2013 11:21am]

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