Monday, April 23, 2018
Health

Struggling financially, Bayfront may seek partner with deeper pockets

ST. PETERSBURG — Bayfront Medical Center, a storied Pinellas County hospital struggling as an independent institution, may be looking for a partner with deeper pockets.

Hospital officials won't say directly that they are seeking a buyer, but do speak of interest in "strategic" partnerships. At a time of consolidation in health care to cope with rising costs and a transforming system, Bayfront's independence increasingly makes it an anomaly.

Two of the region's other standalone hospitals — All Children's Hospital and University Community Hospital — recently shored up their futures by merging with much larger systems.

Bayfront's financial statements help explain the interest in a partnership. In 2011 and 2010, its operating margins, key indicators of its core patient-care business, were razor thin — less than 1 percent, state records show.

In 2009, the operating margin — the difference between patient-care revenues and costs — was $4.8 million in the red.

Experts say nonprofit hospitals generally aim for at least a 3 percent margin. But variations can be wide: St. Anthony's Hospital, a not-for-profit less than 2 miles from Bayfront, posted a 10 percent operating margin in 2011, according to state records.

Recent developments could make it even harder for 480-bed Bayfront to remain a solo player:

• The largest multispecialty doctors' practice in south Pinellas County, Suncoast Medical Clinic, is moving at the end of the year from Bayfront's campus to St. Anthony's, which likely will mean even more patient business for St. Anthony's.

• Two new trauma centers have opened at HCA hospitals north and south of Bayfront, siphoning away hundreds of critically injured patients — and the income they generate to support expensive trauma care.

• Changes to Medicare and Medicaid, the government's health insurance programs for seniors and the poor, are likely to erode income at most hospitals, but particularly at Bayfront.

"It seems to me the biggest challenges are how to survive when revenues are barely growing and (Bayfront) has a very large Medicare and Medicaid share with few privately insured (patients)," said Mark Pauly, a professor of health care management at the University of Pennsylvania's Wharton business school, who reviewed Bayfront's 2011 state financial filings.

"When the Medicare cuts start to bite, they will hurt — and it is not obvious there is any way of coping," Pauly added.

Bayfront leaders acknowledged that the hospital is exploring its future generally, given the many changes facing the health care industry. But it has not identified a prospective partner.

"Everybody is talking to everybody about everything," said Kanika Tomalin, Bayfront's vice president of strategic planning.

In a partner, she explained, Bayfront seeks not just to join a hospital system, but to expand its outpatient services and physician alliances. That's because the U.S. health care system is expanding its focus from caring for the sick to include emphasizing wellness and prevention.

Tomalin said that for all the challenges Bayfront faces, its mission remains constant: quality health care for all who come through its doors.

Once known as Mound Park Hospital, Bayfront has served St. Petersburg for over a century. It has a reputation for welcoming uninsured patients and Medicaid recipients, and prides itself on offering a full range of medical services, some unavailable elsewhere. It boasts Pinellas County's only Level 2 trauma center, and its new Baby Place is the county's only state-designated high-risk perinatal referral center.

"If we are able to access the benefits of partnership — and preserve that mission and continuing commitment to the community — that would be what's best," Tomalin said.

• • •

Bayfront has tried to team up before. In the 1990s, it was among the founding members of a regional network of not-for-profit hospitals, BayCare Health System, which today includes St. Anthony's, St. Joseph's in Tampa and the Morton Plant Mease hospitals in mid Pinellas. BayCare claims the largest share of the Tampa Bay health care market.

But Bayfront had to leave the organization after St. Petersburg city officials learned that it had revised its abortion policy in deference to BayCare's Catholic ties. The city, which owns the land Bayfront sits on, sued the hospital for violating separation of church and state.

Any future change of control at Bayfront, a private, secular hospital, would require the approval of the City Council.

In a highly competitive market, Bayfront's finances have grown precarious.

"What is really disconcerting is their low net patient revenue," said John Large, an assistant professor in health policy and management at the University of South Florida. He noted that most of Bayfront's medical services are funded through Medicare and Medicaid, whose reimbursements are a fraction of billed charges. "As these payer types increase, the hospital may start to lose money."

On the upside, he noted, Bayfront has relatively low debt for a nonprofit hospital.

"We do operate on thin margins and a lot of that has to do with our heavy commitment to the community and charity care," said Bayfront CFO Bob Thornton. "That is the burden that we bear."

But he said the organization remains strong and has invested in recent years in the construction of Baby Place, a new maternity unit, new operating rooms and a heart center.

Finances are not driving its current discussions, Bayfront leaders stress.

"Our evaluation of partnership is not from a position of crisis, financial or otherwise," said Tomalin. "It's really a strategic imperative that's very proactive."

• • •

So who might be interested in Bayfront? None of the major players in the region are raising their hands, at least publicly.

Leaders at Johns Hopkins Medicine, which merged with neighboring All Children's, say they're only interested in pediatrics in the Tampa Bay market.

At the Florida Hospital/Adventist Health System, which bought University Community, officials acknowledge that they routinely reach out to unaffiliated hospitals. But no formal discussions are under way with Bayfront.

The HCA hospital chain, a for-profit enterprise that owns nearby St. Petersburg General, Edward White and Northside hospitals, declined to comment. HCA recently opened trauma centers in Pasco and Manatee counties that are drawing out-of-county patients who used to come to Bayfront.

BayCare isn't in talks with Bayfront, either, officials said. It is building a $22 million medical office at St. Anthony's for the Suncoast Medical Clinic, whose approximately 50 physicians plan to move from Bayfront's campus at the end of the year.

Suncoast doctors will continue to practice at both hospitals, and officials insist that patients will decide which hospital they use.

But experts expect the move to benefit St. Anthony's.

"The reality of buying a 50-physician group means you expect that (hospital) business, diplomacy aside," said Peter Young, a veteran hospital consultant from Fort Myers.

He also said that Bayfront would likely have to change its operations if it were acquired.

"It fits into some other organizational structure, but the question is, what does that look like? And does it fit in as it is now?" Young said. "It fits in with very significant reconfiguration of service lines and likely the elimination of service lines."

While stressing its legacy of quality care for all, Bayfront leaders acknowledge that change may be inevitable.

"How can we be most relevant and meet our goals for the future? There is not one path to that that's predetermined," Tomalin said. "The goals are defining where we go — if we go."

Letitia Stein can be reached at [email protected] or (727) 893-8330.

Comments
Do not eat any romaine lettuce, the CDC warns

Do not eat any romaine lettuce, the CDC warns

Public health officials are now telling consumers to avoid all types of romaine lettuce because of an E. coli outbreak linked to the vegetable that has spread to at least 16 states and sickened at least 60 people, including eight inmates at an Alask...
Published: 04/20/18
Florida hits a milestone: More than 100,000 people are registered to use medical marijuana here

Florida hits a milestone: More than 100,000 people are registered to use medical marijuana here

Florida has hit a milestone of sorts as it slowly moves toward wider availability of medical marijuana.The number of patients in the state who are registered to use the substance has surpassed 100,000 for the first time, according to Florida Departme...
Published: 04/20/18
Florida Hospital Carrollwood spending $17.5 million to expand emergency department

Florida Hospital Carrollwood spending $17.5 million to expand emergency department

Florida Hospital Carrollwood is expanding its emergency department. The hospital, 7171 North Dale Mabry Highway in Tampa, is spending $17.5 million to add 15 new private treatment rooms, new pediatric rooms and waiting areas, and new technology, acco...
Published: 04/18/18
Barbara Bush’s end-of-life decision stirs debate over ‘comfort care’

Barbara Bush’s end-of-life decision stirs debate over ‘comfort care’

As she nears death at age 92, former first lady Barbara Bush’s announcement that she is seeking "comfort care" is shining a light — and stirring debate — on what it means to stop trying to fight terminal illness.Bush, the wife of former President Geo...
Published: 04/17/18
Preparing for the worst, staffers at Johns Hopkins All Children’s learn through simulation

Preparing for the worst, staffers at Johns Hopkins All Children’s learn through simulation

When the patient got violent, Dr. Michelle Hidalgo didn’t have time to think. She had to react. The woman was moving strangely and seemed erratic. Hidalgo had to make a tough call — it was time to physically restrain her for everyone’s safety.Then th...
Published: 04/16/18
Updated: 04/17/18

Lung cancer patients live longer with immune therapy

The odds of survival can greatly improve for people with the most common type of lung cancer if, along with the usual chemotherapy, they are also given a drug that activates the immune system, a major new study has shown.The findings should change me...
Published: 04/16/18
Thousands of pounds of prepackaged salad mixes may have been tainted with E. coli, officials say

Thousands of pounds of prepackaged salad mixes may have been tainted with E. coli, officials say

A Pennsylvania food manufacturer is recalling 8, 757 pounds of ready-to-eat salad products following an E. coli outbreak that has spread to several states and sickened dozens of people.Fresh food Manufacturing Co., based in Freedom, Pennsylvania, is ...
Published: 04/15/18
St. Anthony’s Cancer Center installs bell dedicated to survivors

St. Anthony’s Cancer Center installs bell dedicated to survivors

ST. PETERSBURGSister Mary McNally, vice president of mission at St. Anthony’s Hospital, stood in front of a room of cancer survivors to unveil a silver bell surrounded by butterfly stickers mounted to the wall of the Cancer Center lobby. "So often pe...
Published: 04/13/18
Hand dryers could leave your hands dirtier than you think

Hand dryers could leave your hands dirtier than you think

Washing your hands after you use the bathroom is a good idea. But using a public dryer could undo all that hard work, according to a new study.A study, published in the journal Applied and Environmental Microbiology, examined 36 men’s and women’s bat...
Published: 04/13/18
Meek and Mighty Triathlon draws the young (siblings who are 7, 9 and 11) and not so young

Meek and Mighty Triathlon draws the young (siblings who are 7, 9 and 11) and not so young

The annual St. Anthony’s Triathlon has for years attracted elite athletes from around the world, making the St. Petersburg race one of the premier triathlon events in the country. There’s a big incentive to run fast, swim hard and be the best on a bi...
Published: 04/13/18