A proposal to give Cleveland Clinic $13.6 million in taxpayer funds to cover losses at Indian River Hospital seems all but dead – an 11th hour hitch which followed stories in this newspaper that triggered an overwhelmingly negative public response to the Hospital District’s mishandling of the matter.
Hospital District staff went on vacation for Christmas week before fulfilling Vero Beach 32963’s Dec. 18 public records request for the email public correspondence, but Trustee Paul Westcott forwarded records to this newspaper last week.
Of the first 34 emails received, only one voiced support for funding Cleveland Clinic’s proposed $13.6 million “bridge plan.”
Some of the emails reported receiving great care at the hospital and expressed appreciation for care by the hospital staff, but pointedly added that since Cleveland Clinic had agreed to cover indigent care here in exchange for 10 years of free rent, they expected it to honor that deal.
What exactly did Cleveland Clinic agree to in exchange for the free rent when it took over operation of Vero’s hospital six years ago? Cleveland Clinic’s own news release archive provides the precise language the Ohio-based corporation used in describing the terms back on Oct. 3, 2018.
“In addition to the $250 million investment commitment, the agreements outline that Cleveland Clinic will maintain maternity care (labor, delivery and obstetrics), in-patient well baby care/pediatrics and gynecology services, behavioral health/mental health services, inpatient and outpatient cardiovascular services, inpatient and outpatient cancer care services and gastroenterology services at IRMC for at least 10 years,” the press release said.
“Also as part of the agreements, District support for indigent care at IRMC in general will phase out over three years after the transaction’s closing, while Cleveland Clinic’s charity care policy will go into effect on the first day. After the three years, Cleveland Clinic/ IRMC will assume responsibility for indigent care in general at the hospital.”
The Indian River Hospital District already provides $4 million in taxpayer funds per year to Cleveland Clinic, including more than $3.2 for the Partners in Women’s health OB/Gyn practice, $414,000 for emergency behavioral health care, and $372,000 for outpatient mental health.
One of those responding to the bailout, Sandra Bruckner, posed some pointed questions which have yet to be answered. “Has a value been assigned to the 10 years of rent deferment regarding the building leases? If not, why not? If there is a value why has that not been disclosed?”
Bruckner asked.
The hospital’s lease calls for the market-rate rent to be determined only in 2029, at the point when Cleveland Clinic would be expected to begin paying rent.
Alice Lisboa summed her feelings up saying “No BAILOUT with our taxes dollars to Cleveland Clinic.”
David English expressed his views succinctly, saying Cleveland Clinic’s reported operating losses in Vero don’t justify the potential tax hike.
“As a taxpayer, I am opposed to any bailout using taxpayer funds to Cleveland Clinic or any auspices under that name. Cleveland Clinic is responsible for its own debt incurred as a private corporation. It is their responsibility to manage their funds locally and if not capable of doing so, the parent company is responsible to do so. It would be equally irresponsible for the trustees to bail the Clinic out.”
Diane Zarella objected to the lack of documentation justifying the $13.6 million, adding there had been no written proposal or financial data justifying an expenditure of taxpayer funds.
“As an Indian River taxpayer, I respectfully ask Hospital District trustees to vote NO on appropriating $13.6 M taxpayer dollars. We homeowners pay more than our fair share of taxes already,” Zarella said.
“As a retired banker, I would never lend a customer funds without proper documentation; ie financial statement, profit & loss statement, etc. Please consider the added burden this would put on many senior citizens that reside in Indian River County.”
Former hospital district trustee and former Vero Beach mayor Val Zudans, a local physician, said in a lengthy letter, “I personally do not understand how any current trustee can be fulfilling their fiduciary duty by writing a check of over $10 million of taxpayer dollars without extensive justification, much less a multi-year deal at the last minute.”
Zudans’ email to the Hospital District was sent before Cleveland Clinic announced plans for a new nine-figure hospital in West Palm Beach, but he questioned if there was some strategic reason why a push was on for a December Hospital District vote.
“I am particularly concerned with how this seems to me to be rushed in the last weeks of this board. It has been reported that Chairman (Marybeth) Cunningham is expected to become a full voting member of Cleveland Clinic-Vero Board of Directors upon completion of her term on IRCHD and she wants to secure a multi-year $13 million taxpayer subsidy to Cleveland Clinic-Vero (that was not part of the negotiated long-term lease) before departing the district and assuming her voting position on that board,” Zudans said.
“Has the IRCHD attorney determined where her fiduciary duty would lie on this matter and whether she will be recusing herself for the anticipated upcoming vote,” he asked.
There was no vote, however, as none of the district trustees’ dozens of questions had been answered in writing by Cleveland Clinic’s prior to the December meetings. Trustees put the matter on hold for at least 60 days to give staff time to obtain all the needed information to make an informed decision.
Westcott took the citizen emails on holiday with him and began responding personally. He plans to organize the citizens’ main points into a visual to share at an upcoming Hospital District meeting.
“I’m grateful for the members of the public who took the time to send us emails and who attended our meetings. We have been given insight into how the funding request is being received by the public,” Westcott said.
One reason why public comment is so important at this juncture is that outgoing chair Cunningham repeatedly equated the lack of public comment or participation in Hospital District business with a tacit approval of district actions.
That included the 61 percent tax increase that the Hospital District implemented in 2024.
Now that Cunningham’s term is over, with the community freshly engaged, feedback on the issues the Hospital District faces seems likely to make it more transparent, and more responsive to taxpayer expectations.
Underlying the matter of the $13.6 million in funding is the ongoing debate about how much oversight the district trustees should have over Cleveland Clinic’s operations of the hospital.
The question of public oversight might not be such an issue if the community was wildly happy with the hospital, and if Cleveland Clinic was not losing $60-plus million per year in Vero, but that’s not the reality.
“There were comments concerning the performance of our community hospital that should be seriously considered by the trustees as well as the leadership of Cleveland Clinic,” Westcott said.
“It has been my view that the district continues to have a statutory responsibility for oversight of the hospital,” Westcott said. “Neither the lease nor any of the related governing documents have removed that. I am hopeful that Cleveland Clinic and the district can explore how to work together to better serve our community.”
