It’s official: The long-awaited definitive agreement bringing Indian River Medical Center under the umbrella of the world-renowned Cleveland Clinic will be unveiled at a public meeting at the Richardson Center on Sept. 25.
A vote finalizing the agreement by two of the three boards involved locally – the IRMC board of directors and the Indian River County Hospital District Board – will not take place that day; by law, the vote must be at least seven days from the initial presentation, said Marybeth Cunningham, who chairs the District Board.
That vote is now expected sometime in October – early October if the two boards vote the same way; later if there is negotiating still to be done.
Cunningham said it’s likely each board will hold one or two more meetings after the September presentation to discuss the agreement before the final vote. Each board must separately approve the final terms before the Cleveland Clinic takeover can be submitted to state and federal regulators for approval.
“While this has taken longer than any of us anticipated – it is a more difficult thing when you have three different entities involved – things are still moving along, they’re still being positive,” District Board chairman Marybeth Cunningham said last Thursday. The third entity she referred to is the IRMC Foundation, which raises money for capital projects.
Cunningham said a few items remain in the due diligence process, including a Phase 1 environmental assessment. There is also what she calls “legal finalization.”
“I fully expect the definitive agreement . . . and the amended lease to be ready” by Sept. 25, she said. “If not, we will go through what we have.”
As she often does, Cunningham expressed hope for public comment during the final meetings.
Along with interested taxpayers and presumably future patients, the September meeting is expected to be attended by the IRMC board and District Board as well as attorneys for each entity; Dr. Wael Barsoum, president and CEO of Cleveland Clinic Florida, and possibly other executives from the health system.
Also on hand will undoubtedly be representatives of Juniper Advisory, the Chicago-based firm that has guided the partnership process on the Vero end, and possibly Stout Advisory, hired by the District to give an opinion as to whether the transaction conveys fair market value to taxpayers who own the hospital through the District.
“Part of the reason it’s so far out is we still have some things to clean up but also to give time to ensure all the boards can be there,” Cunningham said.
Some board members have been juggling vacation schedules since July, in anticipation of the all-important vote on the definitive agreement.
The wait means that at its own September meeting, the Hospital District will have to approve its final budget for indigent care at the hospital during the fiscal year starting Oct. 1 without knowing how Cleveland Clinic will participate in those costs.
Still, the partnership process has been relatively transparent compared to similar transactions between other health systems and hospitals because IRMC’s buildings are publicly owned through the Hospital District, which must operate under Florida’s Government in the Sunshine laws.
Part of the definitive agreement will deal with the terms of a new lease agreement between the District and Cleveland Clinic. The current lease with IRMC’s management company includes a clause that certain hospital board meetings be open to the public. The new lease is expected to free Cleveland Clinic of any obligation to run the operation under Sunshine laws.
The public meeting at the Richardson Center on the Vero campus of Indian River State College is expected to last four hours. If all goes well, consultants will spell out detailed results of more than six months of negotiations on member substitution, a term used when two nonprofits combine.
It would allow Cleveland Clinic to take over the independent hospital, assuming its assets and promising to infuse it with enough cash to ensure its future here. It would also bring its world-renowned brand to the small community hospital.
Just last week, U.S. News ranked Cleveland Clinic’s main campus in Ohio No. 2 in its Best Hospital Honor Roll for the third year in a row, trailing only Mayo Clinic. Cleveland Clinic Weston, the healthcare system’s only presence in Florida so far, rose to No. 1 in the Miami-Fort Lauderdale area. Baptist Health was second; Boca Regional was third.
Boca Regional just rejected Cleveland as a partner in favor of Baptist Health. That leaves the Vero hospital and the three Martin Health hospitals in Stuart, Palm City and Tradition as the only Florida hospitals confirmed to be negotiating to join Cleveland Clinic Florida.
Cleveland Clinic’s CFO Steven Glass earlier told the business newspaper The Bond Buyer that, if negotiations go well, he expected to reach a definitive agreement with Martin Health “in the same time frame,” as the Vero deal.
But Martin Health spokesman Scott Samples, while giving a tour to Vero Beach 32963 of the recent three-story addition to Tradition Medical Center, gave no indication that system is anywhere near an agreement with Cleveland Clinic on full membership.
“We’ve been busy with the Cleveland Clinic Heart Center affiliation,” he said. That affiliation was announced in January.
