Editor’s Note: This article ran as part of a two-story package. You can read the companion story here.
Only seven years after the world-renowned Cleveland Clinic came to Vero Beach, taking over a struggling community hospital, Indian River County again finds itself at the crossroads of a healthcare development that could reshape its medical landscape.
A proposal that could result in a new five-story hospital west of Vero on 66th Avenue at State Road 60 has ignited a debate pitting proponents of increased access to healthcare and market competition against established providers and those concerned about overcapacity and financial viability.
Three commissioners who represent south and west Indian River County support the concept of the new hospital to better serve rapidly growing areas of the mainland, and there’s been little public outcry against the project so far – only behind-the-scenes efforts to undercut potential competition by the county’s largest hospital.
In response to the proposal which surfaced just a month ago, Cleveland Clinic Indian River Hospital and top Hospital District staff say Indian River County has a glut of hospital beds and no need for a third hospital. The new 260,000-square-foot hospital would supply 108 new beds by roughly 2033.
Hospital District executive director Frank Isele last month prepared a memo citing low utilization of the county’s existing licensed 431 acute-care hospital beds, and projected that Indian River County will not have sufficient demand to support a third hospital – despite population growth.
Isele’s five-page memo asked “whether new capacity would meet unmet need or primarily redistribute patients, payer mix and personnel among hospitals.”
Cleveland Clinic Vice President and Chief Medical Officer Dr. Richard Rothman told Vero Beach 32963 last week, “I think the (hospital daily) census data would suggest that a county of 170,000 people with beds that are underutilized to the tune of 80 percent, maybe 90 percent in Sebastian, (and) 80 to 88 percent in Indian River, that’s growing at 2.5 percent (annually) probably doesn’t need another hospital.”
Commissioner Laura Moss and lame-duck Commissioner Joe Flescher, who leaves office next month, parroted Isele and Rothman’s “no need” argument during the Oct. 6 County Commission meeting.
Moss’ district contains Cleveland Clinic Indian River Hospital, Vero Beach, Indian River Shores and the South Barrier Island, so her constituents probably don’t need a hospital west of town.
Flescher has Orlando Health Sebastian Hospital in his district, and Cleveland Clinic is purchasing 2.8 acres for its own expansion in Sebastian (see related story) from Flescher’s supporters, the Brognano family.
But Moss and Flescher are in the minority as Loar, Commissioner Joe Earman and Commissioner Susan Adams are bullish on the new hospital, which would be in Earman’s district, a stone’s throw from Adams’ district and 3 miles from Loar’s district.
Loar pointed to Cleveland Clinic expanding its reach with its own plans for free-standing emergency room on Oslo Road as proof that “somebody must think there’s a need,” Loar said.
Only two people spoke from the public podium Oct. 6, one truck driver concerned about traffic on State Road 60, and a failed county commission candidate urging the utmost care in crafting any zoning variance language for the property where the hospital would be built. No outright opposition.
Based upon support expressed by a voting majority of commissioners, and the absence of any public uproar against a third hospital, the property owner is pursuing next steps, which will cost an estimated $1 million.
“We hope to be submitting the formal application over the next few days,” said former county commissioner Tim Zorc, who recruited the local development team on behalf of the Miami property owner.
That application would request three things – for “hospital” to be added as a permitted use, and for height and size exceptions only on the 66th Avenue site, only for a hospital, as an economic incentive recognizing the public benefit of a hospital. The plan calls for opening an emergency room first, then a surgery center, then the main hospital in 2032 or 2033.
Zorc was unfazed by the “no need” claims.
He has said three, possibly four major hospital systems are looking at his client’s property but he cannot disclose the names. In the Sept. 17 issue, Vero Beach 32963 identified the most likely hospitals as Advent Health, HCA Florida and Tenet Healthcare, based upon financial resources, growth and previous interest in Vero Beach.
“As for Cleveland Clinic, I’m neutral on that. We’re just moving forward with our plan,” Zorc said.
It’s unclear what role the county Hospital District has in any decision on a third hospital, as the district is prohibited from granting taxpayer dollars to any hospital other than Cleveland Clinic.
District officials last month discussed the news of a proposed third hospital for six minutes, but took no vote to support or oppose it.
Isele said what seemed to be the case was that a developer with 75 acres was looking for a hospital.
“Going through the possibilities, it didn’t seem like it would be an easy job to find a suitor. You would have to be prepared to lose money for many decades based on our current payer mix and the economics and the population growth in our county. So I think at this point, as I said earlier, I think it’s more smoke than fire.”
The “payer mix” in Isele’s memo refers to the 70 percent of Cleveland Clinic Indian River Hospital’s patients on Medicare, with 12 percent of the patients on Medicaid or indigent.
Medicaid and Medicare pay less than two-thirds of hospital costs.
While private insurance pays much higher rates for the same services, only 18 percent of Cleveland Clinic’s patients hold insurance from private carriers like Aetna, Cigna and Blue Cross Blue Shield.
If the 18 percent with private health insurance – many of whom live in western Indian River County – were to use the new hospital, Cleveland Clinic could lose significant lose revenue. That could impact advanced and specialty care offered in Vero.
Whether a new hospital gets built or not, the proposal from Zorc’s group hasleft Cleveland Clinic feeling under-appreciated.
“We are a top 10 percent hospital in the country. We donated $5 million to Senior Resources, to United Against Poverty. I didn’t hear one person calling me. All of a sudden there’s some silly conversation about a real estate deal and I get 100 calls,” Rothman said.
“It says a lot about the state of this county and how it values the hospital. Why didn’t I get a call from anybody about $5 million in donations? Five million. Half a million dollars to the school district. Yeah, that’s not important.
“A real estate developer, who cares? It’s a guy trying to make $45 million on his property. Do you really think HCA, Tenet or anybody’s going to put a hospital there? There’s zero chance. Advent has over 100 hospitals. You think they need Tim Zorc to advocate for them? Zero chance. And I know the president of Advent. Zero chance,” Rothman said.
“So I’m so tired of this. It’s somewhat hyperbole. And all the good that we do, no one wants to tell that story. It’s only about stuff that’s controversial. And I think it’s kind of a slap in the face. I really do,” Rothman said.
Under Rothman’s leadership, Cleveland Clinic Indian River Hospital has markedly improved in nearly every published performance metric, and hospital finances have turned around.
But the commissioners in favor of a third hospital proposal have heard their constituents in the south and west parts of the county loud and clear. They want a choice, and a hospital closer to home.
Photos by Joshua Kodis
