Hospital District plan to bail out Cleveland Clinic in critical need of many more answers for taxpayers

PHOTO BY JOSHUA KODIS

News Analysis

The Indian River County Hospital District has been on a quest to “tell its story” about what it does in the community, punctuated by a re-branding, a new logo and an upcoming community satisfaction survey. But all the good intentions, good works and image spiffing can be wiped out in an instant if the tax-paying public doesn’t trust the people who run it.

Transparency builds trust.

Back-room deals and treating taxpayer money like a personal checkbook or a private foundation do not build trust.

Chairwoman Marybeth Cunningham now claims that Cleveland Clinic never asked the Hospital District for a $13.6 million bailout. Cunningham asserts that she and Executive Director Frank Isele “offered” the taxpayer money in a private meeting with Cleveland Clinic officials.

At the Hospital District’s Sept. 19 chairman’s meeting (there’s no video, don’t bother looking for it), Cleveland Clinic Indian River Hospital Vice President and Chief Medical Officer Dr. Richard Rothman laid out the dire need for the district’s financial help.

Trustee Dr. Bill Cooney asked what the hospital district could do. Rothman said, “What does it look like for us to come up with some type of short-term arrangement to help us bridge this as our teams are working in Tallahassee?”

Sounds like an ask.

Cunningham, at the Hospital District’s Nov. 20th chairman’s meeting, said of Cleveland Clinic, “I think now they’re looking to us and saying, ‘We need some help, not a lot but some.’ Actually, they would like a lot more, OK. Ha ha ha. But we said, uhn-uh.”

Again, there’s no video, so don’t waste time looking for it.

Cleveland Clinic also put out a news release on Dec. 17 arguing in favor of the $13.6 million taxpayer-funded plan, after Hospital District trustees and the public began asking tough financial questions.

But now, apparently, Cunningham says the hospital never made the ask?

The public will never know for certain which version of the story is true, because this taxpayer-funded bailout was negotiated behind closed doors, out of the sunshine.

Whether Cleveland Clinic asked, or Cunningham and Isele offered, the Hospital District still has no written plan or proposal to justify a $13.6 million bailout. That does not build trust.

Cunningham also said it’s silly to call the money a bailout because it’s not a massive dollar amount like the auto-industry bailouts back when she worked for General Motors.

To local taxpayers, $13.6 million is a lot of money. Cleveland Clinic Foundation had $24.4 billion in assets on its 2023 audited financials. We will continue to call it a bailout.

Even after Vero Beach 32963 chastised the Hospital District staff and trustees in our Thanksgiving issue for shoddy handling of the proposed “CCIRH Bridge Plan” last month, six of the seven trustees met with Cleveland Clinic officials behind closed doors to discuss the $13.6 million funding.

We applaud Trustee Paul Westcott for rebuffing the private sit-down with hospital officials, and instead for pushing Cleveland Clinic to provide crucial financial information in writing, including a strategic plan for righting its ship, and a detailed breakdown of the true cost of indigent care taken on by the hospital.

Six trustees apparently got some of their individual questions answered out of the public eye, but the taxpaying public is still very much in the dark, and many are not pleased about it. Dozens of people wrote to the Hospital District in opposition, and about 50 people attended the two district meetings last week, in person or via Zoom.

Thanks to the public outcry, the trustees delayed voting on the $13.6 million for at least 60 days while staff attempts to pry the requested financial and operating information out of the hospital.

After that vote failed, Cleveland Clinic put out a news release penned by Rothman justifying the need for the $13.6 million and shared it on its social media. So does that mean the hospital asked?

Within hours of the cry-for-help news release, Cleveland Clinic announced plans to build a brand-new 150-room boutique hospital at the luxurious CityPlace shopping, dining, hotel and entertainment complex in West Palm Beach.

Will Vero’s taxpayers view Cleveland’s outstretched hand even less sympathetically with a major expansion now underway in the Palm Beaches.

Cunningham admitted at the Dec. 19 evening business meeting that, as an ex-officio member of the Cleveland Clinic board of directors, she knew of Cleveland’s big plans to splash out on a new hospital for the Palm Beach set, but she could not reveal it.

Withholding important information, like a nine-figure new venture a couple of counties away, while at the same time pushing for a $13.6 million bailout from Indian River County taxpayer funds does not build trust.

Cutting off the microphone while a taxpayer is speaking from the podium during public comment does not build trust. Yet that also happened at the Dec. 19 meeting.

The taxpayer had patiently waited through 103 minutes of the meeting to speak. A previous speaker had spoken for 24 straight minutes and no one gave him the bum’s rush, despite the fact that representatives of agencies receiving Hospital District funds are supposed to wrap up their presentations in 15 minutes.

The citizen who got her mike cut off, beachside Realtor and Central Beach resident Sheila Gallo, ran for a Hospital District Seat in November and received 47.5 percent of the vote, but was edged out by incumbent Trustee Karen Deigl, who voters returned for a third term.

Gallo was being respectful, but said she felt a duty to represent all the people who voted for her in the tight race.

She was doing a decent job of taking the district trustees to task on various matters, saying she and the people who support her are “a hard no” on giving Cleveland Clinic Indian River Hospital a $13.6 million bailout.

Gallo also pointed to what she saw as substantial conflicts of interest amongst the board of trustees, namely, the fact that Deigl is the paid CEO of an agency which receives $1.4 million in grants from the Hospital District. Gallo’s presentation did not go over well with the district. Her mike was silenced.

How could the Hospital District’s good deeds and big plans go away in a flash if the public trust is not restored?

The Hospital District was created by a 1959 special act of the Florida Legislature. That means the legislature brought it into this world, and it can also take it out.

The Florida Legislature – specifically the Joint Legislative Auditing Committee (JLAC) – has the power to order a full operational audit of the Hospital District by the Florida Auditor General.

This is much more involved than a simple financial audit conducted by a friendly local CPA chosen by the Hospital District.

Beyond an operational audit, the JLAC committee also has the power to bring in an investigative agency called the Office of Program Policy Analysis and Government Accountability (OPPAGA) to analyze everything the Hospital District does. The reports of these OPPAGA audits can be quite interesting to watch on The Florida Channel for anyone who detests wasteful, corrupt or inept government.

After an OPPAGA review, the agency can recommend a further or repeated probes into the Hospital District. Or it can recommend to the JLAC committee the district be dissolved and all of its assets liquidated.

The JLAC is a unique committee in that it is bicameral, so it has an equal number of members from both the Florida House and the Florida Senate, and alternating chairs, one from the House and one from the Senate. That means it can act swiftly and decisively as it carries the power of both bodies of the legislature. No reconciliation of its actions is needed.

Longtime residents might remember that the JLAC was extremely helpful during the effort to sell Vero Electric to Florida Power and Light. Audits ordered by the JLAC on the Florida Municipal Power Agency found some pretty shady financial practices. The public airing of the FMPA’s dirty laundry put pressure on the co-op to let Vero buy its way out of terrible power supply contracts, which allowed the utility sale to close.

If members of the JLAC were alerted to citizen concerns about the governance of the Indian River County Hospital District, the committee might refer the district to the auditor general or to OPPAGA.

If OPPAGA completed its examination and gave the Hospital District a thumbs down, the Indian River Hospital property – which the taxpayers now own – would likely be auctioned off to the highest qualified bidder, with Cleveland Clinic having first right of refusal. Proceeds from all Hospital District property would be handed over to the Indian River Board of County Commissioners to manage in accordance with Florida Statutes.

Nobody wants the Florida Auditor General or the OPPAGA staff camping out in their offices for a few weeks, combing through records and asking a lot of uncomfortable questions. Seems it would be easier to just let the sunshine in and be transparent in the first place – if it’s not too late (see story Page 6).

If Indian River County taxpayers do not see immediate improvement in the Hospital District, the Joint Legislative Auditing Committee has some meeting time booked in mid-January. The public always gets time to speak. A well-phrased letter from a legislator like Robbie Brackett or Erin Grall might expedite any JLAC action.

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