Lee Health: A Primer for Converting from Public to Private Nonprofit Healthcare

Lee Health, down in southwest Florida, is the largest public hospital system in Florida.  It is converting from public hospital status to a private nonprofit hospital.  That seems kinda pointless at first. Converting from one nonprofit to another.  But some of the reasons given for the conversion include competitive pressures from other healthcare systems of all kinds — competition is not so much kryptonite to private nonprofit hospitals as it is to public hospitals, I guess — the associated need for flexibility and nimbleness in responding to changes in the healthcare market, and getting out from under public record and open meeting requirements.  Lee Health was already able to solicit deductible donations so it really must have been all the government red tape that was the motivation.   

The conversion is almost complete and fortunately there has been 100 miles of transparency throughout.  Of course, we can’t know whether it will have been worth the trouble for a long time. Will a private nonprofit hospital be less accountable to stakeholders and less providing of charity care than a public hospital?  There is a good chance of the latter, let’s just keep it real.  So anyway, all that remains to be seen.  But if you are writing about or involved in a similar public to private nonprofit hospital conversion, bookmark and download Lee Healthcare’s conversion files.  Lee Healthcare’s webpage has everything from the enabling legislation, the conversion agreement, board presentations and minutes, resolutions, consultant reports, and audited financials.  There are even projections about future charity care and community benefit.  Due diligence has certainly been done and the files makes for a good case study and checklist.

darryll k. jones