Lease Terms Provided for Transparency, Accountability
A review of the original lease between the City of Tallahassee and what is now Tallahassee Memorial Hospital, first signed in 1979, shows the parties agreed on terms that provided for various levels of accountability.
Despite these terms, the record shows that the City of Tallahassee and hospital officials failed to keep the citizens of Tallahassee and Leon County informed about the operations of their community hospital. The failure to consistently implement the terms of the lease created a relationship without accountability and a level of distrust developed over time.
In addition, over the last 15 years, officials gave the public the appearance that all was well, when actually, the healthcare industry was undergoing a major transformation that had important impacts on community hospitals, including TMH.
TMH made efforts to address the transformation with behind the scenes decisions which were not vetted by city officials or the public. And now there is a community divided over an issue involving two of Tallahassee’s legacy institutions. A divide due, in part, to the failure of local officials to take advantage of a road map laid out by Tallahassee leaders over 40 years ago.
The Lease
In 1979, when officials decided it was time for the city owned and operated hospital to separate from local government, the city transferred the operation to a newly created private non-profit organization and leased the city-owned land and assets to the non-profit
However, the lease went beyond the normal landlord-tenant relationship and included parameters aimed at providing the city access to financial information and power over the governance structure. Some of the more publicized terms of the lease provided the use of city-owned facilities for $1 a year in return for the newly formed hospital provided indigent and charity care.
Until recently, it is fair to say that most people were not aware that the city of Tallahassee owned the building and assets that TMH uses to provide healthcare services.
Board Members and Bylaws
Other terms of the lease that were routinely acknowledged in public meetings included the role that city commissioners played in appointing new board members and in establishing and maintaining the governing bylaws. The lease states that “Neither the Articles of Incorporation nor the Bylaws of the Lessee shall be changed without the approval of the Lessor.”
While understanding a hospitals bylaws are probably best left to lawyers instead of elected officials, the appointment of board members is an important process and allows citizens to be involved with the governance of a community hospital. However, TR’s review of city commission meetings found that when the city was asked by the hospital to approve or confirm a board member, there was very little debate or discussion. In fact, TR could find no evidence over the last 15 years where the city sought citizens to serve on the board. Instead, it appears hospital officials decided on the appointments and the city commission routinely voted to confirm without much oversight.
Public Meetings
The lease also addressed public meetings. The lease stated, “Regular Meetings shall be open to the public. No citizen shall be denied the right to address the Lessee’s Board of Directors. Upon Written request, any citizen shall be promptly placed on the agenda for the next regular Board of Directors’ meeting.”
First, TR could find no publicly available schedule of hospital board meetings. And second, over the last 15 years, there has been scant evidence of any citizens addressing the hospital board.
Financial Transparency
The lease also provided for financial transparency. The lease stated that, “The Lessee covenants that the Lessor shall have the right at all reason- able times to enter upon the premises to examine and inspect the financial books and accounts of the Lessee.” In addition, the lease provided that “The Lessor shall have the right to review the budget of the Lessee.”
However, reviewing city commission archives for the last 15 years, TR could find no request by city officials to review the hospital budget or any request for specific financial information related to the operation of the hospital. It seems that access to TMH’s finances would have been of particular interest over the last 5-10 years given the transformation of the healthcare industry.
Implications
Given the current situation, a divided community promoted by opportunistic politicians, it is unfortunate that the prescription written by leaders over forty years ago was not followed. These leaders put in place parameters that ensured the community would stay a part of the “community hospital.” But somewhere along the way, the accountability and transparency became unimportant to elected officials, then professional staff, then the local media, and finally, the citizens.