News Analysis
Cleveland Clinic Indian River Hospital has asked county taxpayers for a $13.6 million bailout over the next four years.
But unlike more than two dozen local agencies which must submit lengthy applications, project budgets, strategic plans, and audited financial statements to the Hospital District for grants of even a few hundred thousand dollars, Cleveland Clinic officials made the big ask without filing one sheet of paper.
Following a discussion with the Hospital District about a proposed four-year bridge plan or “glide path” to help Cleveland Clinic pay for tens of millions annually in hospital care that is not covered by Medicare, Medicaid or private insurance, Vero Beach 32963 requested all backup documents for the meeting agenda item.
There were none.
There were also no documents available in response to a request for email correspondence between the Hospital District and Cleveland Clinic about the bailout money, which would come from a combination of property tax receipts currently in reserves, and taxes currently assessed or to be assessed in 2025, 2026, 2027 and possibly beyond.
Not one email. Not one spreadsheet. Not one memo.
The agenda item was listed simply as “CCIRH Bridge Plan Update,” which gave no indication that the trustees would be discussing the potential expenditure of $13.6 million. Unless a member of the public had attended or logged on to the last few months of district meetings, they would have no clue what “CCIRH Bridge Plan” even meant.
Hospital District Executive Director Frank Isele wished to convey the numbers in his recollection from conversations with hospital officials to us by telephone, but Vero Beach 32963 requested those numbers in writing to force the creation of, shockingly, the only public record in existence to back up a $13.6 million request for taxpayer funding.
Isele’s email showed Cleveland Clinic has proposed the taxpayers fund $4.275 million of hospital losses in fiscal year 2024-25, followed by a projected $3.86 million in 2025-26, a projected $3.15 million in 2026-27 and $2.31 million in 2027-28.
Those numbers represent, based upon previous years’ losses and other projections, a percentage of what the hospital loses each year due to insufficient Medicare reimbursements, but the plan is being sold as the county taxpayers’ contribution to indigent care. This is one thing that will need serious clarification.
Not only was the hospital district keen to enthusiastically discuss this new potential “partnership” to ease Cleveland Clinic’s woes with zero backup documentation, but two members of the Hospital District Board of Trustees asked if they were expected to vote on the matter at the roundtable discussion held at the district offices.
Fortunately, no vote was taken so the public still has the chance to weigh in on the decision.
But Chairwoman Marybeth Cunningham urged her fellow trustees to move swiftly to vote on the matter in the next few weeks before she leaves the Hospital District board. Her target date to vote to approve the funds would be Dec. 18.
“I do think we need to shoot for December, if we can,” Cunningham said.
Cunningham noted there are a lot of things Cleveland Clinic will not put in writing or show their hand publicly on with regard to their strategic plan. She called on the trustees to honor what the Hospital District agreed to when Cleveland Clinic was selected to take over operation of the Indian River Medical Center five years ago.
“We really said we were going to be partners. Cleveland, as Cleveland has eaten $190 million or more in losses from this hospital, while they’re continuing to add services and add doctors. That’s a heck of a commitment for them to make to us” Cunningham said.
“Now they’re looking to us and saying we need some help – not a lot, but some. Actually, they would like a lot more,” she said.
Cunningham pointed out that Indian River County taxpayers trust the Hospital District to make wise decisions with their money because the trustees have earned that trust over the years.
Testament to that trust, Cunningham said, is the fact that no members of the public show up at district meetings to complain – even important meetings when the property tax rate and budget are being set.
Trustee Paul Westcott has stated on numerous occasions that he often hears from people across the county, on the street or even while out grocery shopping, who are very concerned about how the Hospital District spends taxpayer dollars – even if people do not show up or speak at public meetings.
Seeing no reason to rush an important, multi-year financial decision with two newly elected trustees coming on board in January, Trustee Kerry Bartlett strongly urged the board to take its time in approving the Cleveland Clinic funding request.
“I just want to make sure that we all take a deep breath and let’s come at this strategically, with no baggage, no judgment and start to outline a process to get us to a decision. And that decision could be yes, it could be no,” Bartlett said. “Some people, it sounds like, are down a path already, but none of us has enough information.”
Trustee Karen Deigl said she agrees with the need for a deliberative process, but that she has no desire “to drag this out” across several meetings.
Treasurer Michael Kint said he’s not crazy about such a large expenditure outside of the normal grant funding cycle and the budget approval cycle. If the Hospital District gives Cleveland Clinic more than $4 million this fiscal year in monthly draws, “We’re wiping out our reserves, and that’s just problematic,” Kint said.
Kint said it’s going to very tough to keep taxes down, maintain adequate reserves and afford this huge new expenditure, and trustees will need to justify this to taxpayers.
“I’m not sure that the public is necessarily going to understand or be excited about it,” he said.
District trustees were given until Monday to submit questions or requests for information they want from Cleveland Clinic before they would consider taking action on the additional funding for hospital operations. Board attorney Jennifer Peshke was also asked to research whether or not the board could legally commit to a multi-year funding deal.
“I know we’ve done this historically before, but did we do it right?” Deigl said, reminding the board that the Hospital District is now being audited by the state and that all special taxing districts are under heightened scrutiny from the Florida Legislature.
Deigl said she would definitely need more detailed information on what the money would be spent on, what kinds of services and how much of it would fund indigent care.
Even if Cunningham somehow convinces her fellow trustees to vote to move ahead with the Bridge Plan in December while she’s still on the board, members of the community have raised questions about whether Cunningham should be required to recuse herself from the vote, or any vote involving Cleveland Clinic, during the last month of her term.
Cunningham told Vero Beach 32963 earlier this month that she is being considered for a voting seat on the local Cleveland Clinic board, with a vote on her board candidacy to be held sometime in December. She currently serves as an ex-officio, non-voting member of that board for the purposes of keeping the Hospital District informed on things going on at the hospital.
“I don’t want to create an opportunity for the community to come here with pitchforks and torches, because that’s the path we’re on with this decision,” Westcott said.
The Hospital District hiked the property tax rate double-digits this tax year, so property owners who pay attention are now more aware of their Hospital District taxes.
“I disagree with that totally,” Cunningham said.
“Marybeth, the optics here are very difficult,” Westcott said. “I like working with you. I enjoy working with you and this is not a slight on you.
“I’m not opposed to helping Cleveland Clinic,” Westcott added, but he said if the vote were taken this past week, he would have voted ‘No’ to a rushed decision.
“You’ve worked hard here, but the optics, you know, you’ve expressed a desire to be on the (Cleveland Clinic) board and I think that fresh, different eyes need to be involved, since we’re at the beginning of the process, so the taxpayers know that this process is solid, and is taking into account the prior commitments that were made five years ago.”
Westcott said if the losses are due to management issues, the trustees may determine that’s not the taxpayers’ problem, as Cleveland Clinic was afforded 10 years of no rent on the hospital – which the county taxpayers continue to own – in exchange for Cleveland Clinic providing indigent care and investing in and improving the hospital.
At oresent, Westcott said the hospital district only receives a “narrow slice” of information on Cleveland’s finances – the balance sheet for Partners in Womens’ Health, plus aggregate information on the Cleveland Clinic corporation as a whole. The district does not see a balance sheet for just Cleveland Clinic Indian River, to identify what areas are bleeding cash – beyond the low reimbursements from Medicare and Medicaid.
“I think we need to make every effort as part of the process to make sure we’re fully informed,” he said. “What are the performance issues financially that are contributing to the deficit?”
Trustee Dr. Bill Cooney agreed with Westcott that the trustees need to better understand the reasons for the hospital’s losses. Cooney said he wants to see a strategic plan on how Cleveland Clinic plans to address the larger local financial issues before committing any additional funds.
Cooney also said he wants to attach some expansion of access through Cleveland Clinic to on-staff primary care physicians in return for the money.
The next two meetings of the district trustees are scheduled for 10 a.m. Wednesday, Dec. 18, and 4 p.m. Thursday, Dec. 19. The Dec. 18 meeting is a roundtable chairman’s meeting held at the district headquarters, 1705 19th Place, Suite G3, Vero Beach.
Taxpayers can send the Hospital District trustees an email through the public records custodian Kate Voss at [email protected] and ask that the correspondence be shared with all of the trustees.
