The Southeast Volusia Hospital District has entered exclusive negotiations to sign a letter of intent for Naples, Fla.-based for-profit chain Health Management Associates to lease management of Bert Fish Medical Center in New Smyrna Beach, Fla.
Bert Fish's board of directors had narrowed its partnership candidates to Health Management and Halifax Health, a public system based in Daytona Beach, Fla. Consultants hired by Bert Fish leaders said earlier this month a deal with Health Management would be more financially beneficial. Halifax CEO Jeff Feasel said the system is still open to discussions if matters change for Bert Fish and Health Management, according to the report.
If the deal is approved, as is expected within the next four months, Bert Fish Medical Center will forego taxpayer support after seven years, potentially eliminating the need for local hospital taxes. Under current negotiating terms, Health Management will spend $50 million in immediate facility improvements to the hospital and another $40 million over the next 10 years, while maintaining current levels of staff, compensation and charity care. It would receive input from an advisory board of community board but would not be subject to Sunshine Laws requiring open public meetings. A website, bertfish.whyhealthmanagement.com, has been launched to inform the public of the potential lease agreement.
Industry experts have speculated lately that Health Management may be nearing a takeover, sale or merger after the announcement of CEO Gary Newsome's retirement, tensions with its largest shareholder and federal investigations and negative press regarding billing practices.
Halifax Health is also facing fines totaling between $350 million to $600 million in a federal whistleblower suit regarding allegations Medicare fraud, which Halifax has denied. That suit goes to trial in November.
In a letter to the board of commissioners on behalf of medical staff, Bert Fish CMO Charles Kollmer, MD, expressed doubt that the hospital's financial situation was dire and that partnering with either of the two hospital systems would be beneficial. "Both of these appear to be quagmires," he told the Daytona Beach News-Journal. "To jump from a potential fire into a definite fire doesn't make a lot of sense."
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