Hospital leaders discussed the facilities’ abilities to serve low-income Floridians during an Oct. 19th Florida House Health and Human Services Committee meeting.
Florida Hospital Association (FHA) General Counsel Michael Williams said FHA represents 320 hospitals and 71,000 beds. He said hospitals serve as economic drivers for the communities they’re in, citing a University of Florida study that attributes hospitals with more than $177 billion in annual economic output, including $81 billion in wages and benefits and nearly $23 billion in tax revenue and local government support.
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“One in 10 jobs in the state of Florida are tied to hospitals, and Florida hospitals directly employ almost 300,000 full-time employees,” Williams said.
FHA represents for-profit, government, public, and nonprofit hospitals. Public hospitals include special hospital districts, which are created by general law, special act, local ordinance, or under the direction of the governor.
“These special hospitals were created under statute generally because that local governing body determined that there are healthcare services that our counties need that are not being met. Those might include promise centers, (regional perinatal intensive care centers), and any other (transplant hospital). They’re organized because their local municipality determined they needed to create a special hospital in the district.”
Independent special hospital districts can levy taxes, issue bonds, or seek protection under sovereign immunity.
“Some have the ability to tax, others don’t,” Williams said.
FHA periodically develops comprehensive reports for the IRS regarding community benefits for its nonprofit hospitals. Its public and nonprofit hospitals provided $4.9 billion in community benefits in 2019, with $3.9 billion representing free care for low-income patients, Williams said.
Safety Net Hospital Alliance (SNHA) of Florida CEO Justin Senior discussed the 14 hospital systems SNHA represents, which include public hospitals, academic medical centers, children’s hospitals, and a regional perinatal intensive care center.
“They’re all nonprofit. They take all patients, regardless of ability to pay, and we tend to be located in areas where there is low-income access for the communities we serve. We run lines of business that other hospitals won’t because the margins are too low, or the margins are negative. We also maintain expensive, low-volume units that are at-the-ready at all times for the benefit of public health. We see more than a fair share of Medicaid patients, as well as our fair share of patients that are uninsured or are unable to pay.”
SNHA hospitals will generally serve more charity care patients than other hospitals, and a third of the patients at some of its bigger hospitals are Medicaid members, Senior said.
“It wouldn’t be unusual for some of our big hospitals to have a third of the patients or more be Medicaid or uninsured,” Senior said. “We have some members where 60-70 percent of patients are on Medicaid or are uninsured. That does have an impact because Medicaid tends to pay lower than Medicare or commercial [insurance], so it does put some pressure on our hospitals. We tend to have lower margins than other hospitals because of that.”
SNHA hospitals contributed more than 46 percent of the total charity care in Florida in both 2020 and 2021.
“We also run a large percentage of the level one trauma centers,” Senior said. “And to do this is a really high expense because you have to have about 20-25 specialists and subspecialists at the ready and available every day, all day for anyone who walks in the door. And you don’t really know who’s going to come in the door that needs trauma treatment. Whether it’s going to be a member of Elon Musk’s family, a Medicaid family, or an uninsured family. But it has to be ready for everyone in the region.”
While SNHA hospitals’ operating margins might tighten in relation to their clientele, there is no compromise on delivering top-notch quality care, Senior said.
“If you look at the state of Florida’s safety net hospitals and members of our group, you will see we tend to be all over the US News and World Report rankings as the top hospitals in the state,” he said. “We do very well on the (Centers for Medicare and Medicaid Services’) Star Quality ratings. It’s really important that the families that come into our facility get world-class care. And every one of our facilities is committed to that.”
Committee GOP Whip Rep. Adam Anderson (R-Palm Harbor) asked about the government’s involvement in operating hospitals.
“Why is the government in the healthcare business? The VA is a unique population set, we need to take care of our vets. But it looks like we have over 30 special district (hospitals) that are at least partially government funded. Many of which are probably operating in the red. So there’s a deficit there. Is there any plan to bring these hospitals more to the private sector? Is there an overall strategy or plan to offload these hospitals, to bring them to a point where they can be profitable and a private institution would be interested in taking it over?”
Senior said that is ultimately a decision made by the local governmental entities that designate special district hospitals.
“I can tell you, for example, that Tampa General used to be a public hospital, then went private,” Senior said. “Lee Memorial Health in Fort Myers right now is a public hospital (that) is exploring the possibility of going from being a public hospital to being private. I don’t think any of our other members are exploring it right now. Several of them are in a positive operating margin situation, and I think everyone has that goal. Ultimately, it’s a local decision on how the hospital should be structured.”
Rep. Jervonte “Tae” Edmonds (D-West Palm Beach) asked about the workforces at the hospitals.
“The biggest issues in my county with hospitals is the staffing shortage,” Edmonds said. “What are we doing to increase staff in our hospitals?”
Williams noted that COVID-19 greatly impacted hospital workforces, leading to a nurse vacancy rate of 21 percent in 2022.
“We’ve reduced that to 13 percent, which still puts it at a 25-year high, but it’s much closer to where the high used to be than that exorbitant number. Hospitals have responded to the move toward contract staffing by increasing wages, adding overtime, (and) up-training their staff. They’ve done a lot of work to make sure they’re creating an environment to maintain their workforce. It’s critical that your nursing staff are full-time employees and not contract, if you can avoid it, because there’s a culture a hospital needs to cultivate that can’t be done in 180-day or 90-day stretches.”
Rep. Marie Paule Woodson (D-Hollywood) asked how Medicaid redeterminations are impacting hospitals. More than half a million Floridians have lost their health insurance since Medicaid redeterminations began in the state, and officials still have to determine whether over two million more will remain covered.
“In light of the disenrollments on our Medicaid patients, and those who are not insured now, I’ve seen how many [residents nonprofit hospitals] serve,” Woodson said. “How are you ready to take on those additional patients that will be coming up that are taken out of Medicaid? We are going to see a surge in hospitals and emergency rooms of those patients without insurance that will be coming.”
Senior said SNHA hospitals will be ready, although its hospitals have not seen surges of residents who have lost coverage yet.
“We take patients regardless of their ability to pay, and we’ve been watching that very closely to see how that impacts our operations,” he said. “So far, thankfully, we have not seen any major disruptions in any of our operations. Our hospitals are actually eligibility points themselves.
So if somebody has been dropped from Medicaid and they come into one of our hospitals, we actually can sign them back up if that was an erroneous disenrollment. And we can get them back enrolled in the program. If they don’t have insurance, we will treat them anyway. We haven’t seen a surge of patients, and hopefully that holds. We haven’t seen a cost burden.”