1. Opinion

Editorial: Protect Bayfront's safety net of care

SCOTT KEELER   |   Times   Since being purchased by Community Health Systems in 2014, Bayfront Health St. Petersburg is undergoing a financial transformation. The once struggling hospital is now turning double digit profits.
SCOTT KEELER | Times Since being purchased by Community Health Systems in 2014, Bayfront Health St. Petersburg is undergoing a financial transformation. The once struggling hospital is now turning double digit profits.
Published Nov. 27, 2017

For generations, Bayfront hospital in St. Petersburg has been where poor and uninsured residents regularly turned for quality health care. Now the hospital's for-profit owner has offered to buy the minority stake owned by a local nonprofit that acts as a watchdog, which would silence the last community voice in the hospital's operations. It might make financial sense for the nonprofit, but Bayfront remains a critical safety net and city officials must take additional steps to preserve and protect that mission.

Bayfront opened in 1906, and over decades it grew into one of the area's most vital institutions while remaining independent and not-for-profit. But by 2012, it was operating in the red and was sold for $202 million to the for-profit chain Health Management Associates, which was soon acquired by Tennessee-based Community Health Systems. As part of the original ownership change, a nonprofit foundation was given a 20 percent stake in the hospital plus half the seats on the hospital board with the goal of ensuring Bayfront's civic mission remained strong. The profits of the sale seeded the Foundation for a Healthy St. Petersburg, which now has assets topping $167 million. Last year it handed out its first round of grants, awarding about $4 million to 19 local organizations supporting an array of causes. A few examples: expanding capacity at the St. Petersburg Free Clinic, assisting low-income people with disabilities, addressing homelessness among LGBTQ youth and coordinating with Pinellas schools to combat childhood obesity.

Now the hospital wants to buy the foundation's stake for $26.5 million, a windfall that could help fund even more efforts to improve the health of south Pinellas residents. The foundation also would be relieved of approximately $1.5 million in annual losses it incurs from its affiliation with the hospital. Community Health Systems is suffering under heavy quarterly losses, owes nearly $2 billion to bondholders and has sold dozens of under-performing hospitals. And as Times staff writer Justine Griffin recently reported, the company is facing a federal subpoena related to its charity care. Consolidating ownership of Bayfront obviously puts the hospital in a much better position to be sold, though company and foundation officials insist it's not for sale. City Council members have been smart to take those assurances with a healthy dose of skepticism.

Everything about this deal says proceed with extreme caution. Hospital officials knew about the federal subpoena when they pitched this plan to the City Council in October but failed to mention it. After news broke about the investigation, they still weren't talking. Foundation officials describe the $1.5 million in carrying costs as crippling, yet claim to be earning 13 percent interest on a $137 million endowment. The public needs better explanations and accounting for how this ownership change would benefit the community. And let's remember some of the top leaders of the foundation — including founding president and CEO Randall Russell, the grants and projects manager and the communications director — only recently moved to St. Petersburg and may not fully appreciate what the hospital means to the city as they lobby to maximize the foundation's financial position.

Because Bayfront sits on city-owned land, the City Council has to approve the sale of the foundation's stake in the hospital and will consider the issue in December. Before giving its blessing, the council must ensure that charity care remains at the heart of Bayfront's mission. One idea being considered would require Bayfront to provide a level of charity care equivalent to what the city could get in rent for the Bayfront property. Estimated at the low end at about $8 million a year, the city should demand more than that, and it should be over and above the charity care Bayfront currently provides. Then the hospital should have to open its books every year and prove it is meeting that benchmark. These details, which should be written into the lease agreement, will be critical if the hospital's ownership changes hands again, which seems more likely than not given Community Health's financial picture in this era of consolidation and greater efficiencies.

Splitting Bayfront Health St. Petersburg from the foundation is a realistic but unfortunate consequence of today's health care economics. The money that would flow to the Foundation for a Healthy St. Petersburg from the sale of its stake in Bayfront Health St. Petersburg would benefit the community, but there is a significant loss in silencing a local voice on the hospital board advocating for the poor. With all the unanswered questions surrounding Community Health Systems' finances and an apparent federal investigation, Mayor Rick Kriseman and the City Council should craft an airtight agreement that ensures a commitment to caring for the community's most vulnerable.