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Private teaching hospital cost set at $153-million

Published Oct. 1, 2005

Tampa General Hospital's public board ended six months of secrecy Wednesday with unanimous support for a dramatic plan to take the hospital private, a strategy almost certain to win formal approval in 60 days unless opponents can muster an alternative plan.

The board approved Dr. Bruce Siegel's plan to abandon the hospital's Davis Islands home by 2002, build a $153-million research and teaching hospital adjacent to the University of South Florida and turn over operations to a not-for-profit corporation.

Yet the plan won't abandon the "sacred responsibility to provide for the medically indigent," said Siegel, the hospital's president and New Jersey's former public health commissioner. He said his plan is the only way to save Tampa General and create a vital research institution.

"We can't downsize ourselves to greatness," he said. "I want you to help me end that losing streak once and for all."

The board gave him 60 days to return with a negotiated lease with the Tampa General Hospital Foundation, a not-for-profit fund-raising group, to create a diverse board that would run the hospital and oversee the development of the new Florida Health Sciences Center.

The approval came after four hours of sometimes emotional public testimony divided between those who applauded the move and those who feared the impact it will have on care for the poor. Despite pleas for more public hearings before taking action, the trustees went ahead with the vote.

The board called for at least three public hearings to explain the plan and listen to alternatives for a hospital officials say is at the edge of bankruptcy. But board members indicated they most likely will forge ahead despite what they hear.

"I don't think we will turn around and go back," said board member Bob Edwards, an advocate of privatization. "Simply saying they don't like it is a waste of time as far as I'm concerned."

Still, they could face a battle in Tallahassee.

Siegel's plan to build a 450-bed acute care hospital within walking distance of the not-for-profit University Community Hospital concerned UCH president Norm Stein, who said it is unwise to build a new hospital when the entire industry is fighting to fill empty beds. Stein said he will challenge a transfer of Tampa General's state-issued certificate of need to the Fowler Avenue location if it poses a negative economic impact on UCH.

"If you're moving a 450-bed hospital within walking distance, it's sure to have an impact," said Stein, whose hospital does not have a research mission and is closed to USF doctors. "How are they going to be able to build a new facility and move from where they're at, and still be able to deal with the financial pressures of moving forward?"

Siegel and board chairman H.

L. Culbreath believe they can raise $100-million in private donations to partially fund their plan. Despite claims the hospital is losing money and Culbreath's recent statement that the hospital will be bankrupt in four years, they also estimate the current hospital will show a $57.8-million profit by the year 2000, revenue that would help fund the project.

The plan includes paying off an outstanding $123-million bond debt for construction completed in the 1980s and assuming a new $232-million debt that would give the hospital access to more capital with "modest" increases in its payments. Siegel said bond insurers have been alarmed recently by drops in the hospital's cash reserves.

The board's formal approval of Siegel's plan would end almost 17 years of attempts to privatize a community institution that is best known for its high-quality of acute care, regardless of ability to pay.

His plan delivers the hospital to a primarily white, 28-member foundation board weighted heavily with prominent lawyers and members of old Tampa society. Although a new board would be created to oversee the hospital, critics questioned the composition of the existing foundation board and the commitment to the poor.

"I would certainly feel better knowing the foundation had a diverse group of people committed to the cause rather than fund-raisers," said retired Tampa surgeon Fred Reddy. "I get the perception it's a done deal."

Siegel, who developed the plan with a consultant, said he concluded the current hospital is poorly located in a flood plain and far from population growth. He said the 1.7-million square feet of space is "sprawling, inefficient and difficult to use."

Tampa General, which now is licensed for about 1,000 beds, usually has fewer than 400 patients.

The proposed hospital would include the elite burn unit and heart, liver and kidney transplant programs. Located on in the 87-acre University Technology Center, at the northeast corner of Fowler Avenue and Bruce B. Downs Boulevard, the hospital would be positioned as a magnet for medical research companies.

Siegel, who is using the Oregon and Massachusetts Health Science Centers as his model, said the biomedical complex could be expected to attract private industry and add 1,000 jobs a year to the Tampa Bay economy. Siegel said a mix of USF and private doctors would be vital to the project's success.

His vision also includes an expanded network of primary care clinics to serve insured patients and clients from the county's medically indigent plan and offer outpatient surgery. Siegel said he also has considered purchasing or creating a home health care business, considered crucial for a multi-service hospital network.

His plan alarmed some opponents who see Tampa General as a public safety net for the poor, despite changes in Medicaid and local funding that also send indigent patients to private hospitals.

"These are turbulent times for poor people," said Otis Anthony, a community activist who spoke against the plan. "If the economic incentive is not there, St. Joseph's will not be there to take care of poor people."

Siegel's proposal would turn Tampa General's board, the state-chartered Hillsborough County Hospital Authority, into a lame-duck panel with little power beyond standing by in case the private board fails to meet its indigent care responsibilities.

The public board also would be responsible in 2002 for selling the current hospital and its prime 20-acre site at the foot of Davis Islands. Siegel said a title search of the property, which was deeded to the city in 1925 for a hospital, shows that the land is owned by the hospital authority.

The next step for the authority will be to develop an outline of a lease agreement for review at a public hearing. Trustees, after some debate, agreed to present the concept at the first hearing, present the plan at the second, and return in 60 days to vote on the final proposal. Critics said the action makes it clear the public will have little room to sway the board.

"One thing we must do is embrace the public trust," said board member Jay Wolfson. "It is not going to be easy."

Details of the TGH privatization plan

The Hillsborough County Hospital Authority authorized Dr. Bruce Siegel on Wednesday to move ahead on a deal to turn Tampa General Hospital from a public hospital to a private, not-for-profit hospital.

The plan would:

+ Build a $153.7-million research and teaching hospital adjacent to the University of South Florida.

+ Raise an estimated $100-million in private donations for the new facility.

+ Phase out operations at the Davis Islands hospital within five years, cutting about 1,000 jobs.

+ Include a commitment to health care for the poor in the lease agreement with the private corporation that would take control of the hospital from the Hillsborough County Hospital Authority.