FSU Board of Trustees chair says TMH ownership 'wasn't even on our radar'
“Up until about 10 days ago, this wasn’t even on our radar screen,” Collins said in an interview with the Tallahassee Democrat Wednesday. “The hospital we’re building in Panama City and the partnership we have with TMH is what we were focusing on.” FSU’s Board of Trustees met virtually Wednesday morning ahead of a Florida Board of Governors approval that same day in favor of the university being issued up to $413.9 million in bonds to finance a new FSU Health hospital construction in Panama City Beach.
That led hospital backers to accuse Tallahassee Mayor John Dailey and City Manager Reese Goad of meeting in secret with FSU President Richard McCullough, but the university leader told the Democrat FSU is simply looking to build on the relationship between TMH and the city.
“The vision we have for FSU Health is to provide excellent and improved healthcare in this region and in Panama City Beach,” McCullough told the Democrat Wednesday. “That’s our goal, and we look forward to working together with TMH and the city with whatever they decide to do.”
Days after the city’s agenda item became public, McCullough sent a letter declaring interest in seeing TMH become an Academic Medical Center, commonly referred to as a "teaching hospital," presumably under the FSU Health banner.
Goad acknowledged to the Democrat that he and the mayor met with McCullough a week before the agenda item appeared and that McCullough expressed FSU's interest in ownership of the hospital. But he said similar discussions have occurred periodically over many months and only TMH's request to change its bylaws with the city triggered the agenda item.
Collins dismissed accusations that FSU is launching a "hostile takeover" bid for the hospital.
“Frankly, I don’t think any of us know at this point what the city really wants to do,” Collins said. “Everybody has just taken off with some wild assumptions. We don’t have any plans to take over the hospital. It’s not our asset – it's the city’s asset. If the city decides to go another route, then that’s up to them.”
He added: “We have nothing to do with this – other than our partnership with TMH both on our academic health center that we’re building here and the project in Panama City – and for anybody to suggest that we’re driving this discussion or moving this forward, it’s just not true.”
Governors Vice Chair Alan Levine took the opportunity Wednesday to address in part the tension between the city, TMH and FSU.
That came after a discussion about FSU’s future Panama City hospital during a Facilities Committee meeting. He quoted TMH President and CEO Mark O’Bryant’s response in an interview with Tallahassee Democrat.
When asked if FSU is essentially trying to emulate what the University of Florida has in many ways – regarding the UF Health Shands Hospital – through a possible ownership of TMH, O'Bryant said: "I'm not sure that's the model you want. They don't really focus as much on the local community over there because they have a different mission. Their mission is for more academic research. So if you think about the whole population, people should be concerned.”
“I take great offense to that comment,” Levine said, regarding O'Bryant's response.
“As a member of this board, when somebody in a position like that makes an uneducated comment about the investments we make in our academic medical centers and to mischaracterize what their mission is in those communities, I do think something strong needs to be said to respond to that,” he added.
“FSU gets to decide who their partners are,” he went on, “but I would strongly encourage their partner here in Tallahassee to rethink their position on that.”
Although Collins says owning TMH is not a plan of the university’s, he acknowledges it’s an interest – but only to a certain extent.
“It’s an interest for us in the sense that we have an academic medical center that we’re building out there, and it’s a partnership with the hospital, so our partner is of interest to us,” Collins said. “We’ve been working on that partnership with TMH for both of these projects for three years, and it’s worked well so far.” FSU and TMH broke ground on the medical space near it's Panama City campus in January 2023 ahead of a groundbreaking on TMH’s campus in Tallahassee later that year for a new academic health center.
More on FSU’s future Panama City hospital construction after approval
As FSU makes moves with Wednesday's approval for $413.9 million in bonds for the construction of a new hospital in Panama City Beach, the facility is part of a greater FSU Health project for a new medical campus in the area.
“It’s a big deal,” McCullough told the Democrat. “This is the largest debt issuance that we’ve ever had at FSU. Some people have to drive about half an hour or so if they need healthcare in that region, so we’re just really excited to play our part to help. Right now, we’re really focused on community healthcare.”
The university will “partner with an operator, anticipated to be TMH pending approval by the City of Tallahassee,” to lease and operate the new state-of-the-art hospital in Panama City Beach, according to an FSU release.
Board of Governors OKs $413.9M in bonds for FSU to build a new hospital in Panama City Beach.
Project planning and design have not been completed but BOG documents show that the project, including design, construction, and equipment for a five-floor, 340,000 square foot facility, are projected to total $328 million.
The Panama City Beach hospital will initially open with 80 beds and four operating rooms to support orthopedic surgery, otolaryngology, gynecology, and general surgery. FSU Health in Panama City’s footprint will eventually be able to accommodate up to 600 beds.
The hospital will be built on an undeveloped 18-acre parcel of land donated by The St. Joe Co. adjacent to a new urgent care facility that Tallahassee Memorial Healthcare built called TMH Physician Partners and Urgent Care facility.
Documents show FSU intends to enter into a long-term lease and management agreement with TMH to manage day-to-day operations. TMH will make lease payments to FSU in an amount greater than or equal to the annual debt service of the bonds.
The approval comes as FSU and TMH, which have been operating under a memo of understanding, are at odds over the future of a City of Tallahassee-owned hospital and whether it should be transitioned into an academic teaching institution as part of FSU or continue to be run by TMH, which has a long term-lease with the city to manage the facility.
Offense taken
Hospital administrator and Board of Governors member Alan Levine said he normally doesn’t involve himself in local disputes but took offense at TMH CEO Mark O’Bryant’s comments to the local newspaper about the dispute.
O’Bryant told the Tallahassee Democrat that TMH is community-based and that its board comprises local residents. By contrast, he said, FSU is governed by an appointed board whose members are not local.
When asked whether FSU was trying to emulate the University of Florida, which operates its health care facilities in Gainesville and Jacksonville under the UF Health moniker, O’Bryant told the paper: “I’m not sure that’s the model you want. They don’t really focus as much on the local community over there because they have a different mission. Their mission is for more academic research. So if you think about the whole population, people should be concerned.”
Levine, who is chairman, president, and CEO of Ballad Health, said he “takes great offense to that comment.”
Levine told the BOG he compared charity and Medicaid care between UF Health and TMH and discovered that UF has three times as many Medicaid patients as TMH, with a 15% caseload versus 5%, respectively. Additionally, UF Health offers a financial assistance policy to provide charity care to people who earn 200% or less of the federal poverty level. TMH’s financial assistance policy is set at 150% of the FPL.
“I don’t think it’s fair. If you were to go to Jacksonville or go to Gainesville and ask people whether or not our academic medical center cares about the local community and that’s not what drives decisions they make, then you don’t know much about academic medical centers,” Levine said.
He called O’Bryant’s comments “uneducated” and said, “I do think something strong needs to be said to respond to that.”
Levine offered this unsolicited advice: “FSU gets to decide who it partners are but I would strongly encourage their partner here in Tallahassee to rethink their position on that because it’s not true.”
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