As a former Boca Raton Regional Hospital (BRRH) board member, I am often asked what the sale of the hospital may mean to Boca. It’s called a merger for window dressing but whomever is chosen, BRRH will follow its lead. It’s a sale, plain and simple. BRRH can’t realistically be the same—it will be better given the capital and the synergies of a bigger and probably more efficient partner.
Things change, times change and change is inevitable. The hospital can’t and won’t be the same. For example, Cleveland Clinic, a prospective suitor, is big into heart medicine; that is its specialty. If Cleveland succeeds in partnering with the hospital, I think it would refer heart patients to either its Cleveland, Ohio or its Broward County facility, depending on the condition of the patient.
Boca Raton Regional Hospital will change with the times and the changing reimbursement levels. It’s a new ballgame, folks, and it’s called the economics of scale. The partner will be in a better position to negotiate a higher reimbursement level from insurance companies for the hospital given that BRRH is now part of a larger group. The partnership is a merger with benefits going to the larger entity—as it should be.
I also predict that any prospective partner will not pay an administrator what they paid CEO Jerry Fedele—reportedly upwards of $750,000. In fact, I suspect that in the long run there will be a “talking head”—not a talented leader—to represent the partner. Window dressing maybe, but definitely a cost savings. Much of the administrative overhead of the hospital will be eliminated. Why? Simply because it is in many cases a duplication, a redundancy of the partner’s operating costs.
Will there be a foundation? Let’s say the hospital receives $500 million from the merger—not an unreasonable amount. Who will administer and invest these dollars?
BRRH is a community asset so who will decide who oversees the foundation and decides what entities in the city receive grants from it? It certainly represents a wonderful opportunity for the community to benefit from this longstanding institution that has served us so well.
I would even go so far as to suggest that the decision makers open a discussion with the Community Foundation of Palm Beach/Martin County. Its model is excellent and its processes are meticulous in determining how money is invested and who receives the grants. This is a big decision and there’s no better expert from which to seek advice than this organization. I suggest we take advantage of it.
Lots of questions!!! Stay tuned.