Could the City Take Back the Hospital?


by Arnaud and Naja Girard…….

“He put some superglue on the wound, a piece of gauze and taped it,” says Dan Schramm, who went to the ER at Lower Keys Medical Center last year for a deep gash above his eye. “The doctor didn’t even clean up the wound at all and later it got infected.” The whole thing took about “two minutes.” He says the hospital charged him $4,000 for the ER and he was billed another $800 for the doctor.

Over the past year, animated by former City Commissioner Harry Bethel, angry Key Westers have shared a seemingly endless supply of stories of extravagant billing at the local hospital. Complaints were to be expected explained hospital community liason Bryan Green:  Profit margins at LKMC have been as high as 32 percent of its revenue when the average profit margin in hospitals in the U.S. is only 7 percent.

In the midst of accusations of fraud and price gouging came this surprising news: The hospital was once publicly owned. It might have been unlawfully transferred to a for-profit company and Key West wants it back!  Could it happen? Commissioner Sam Kaufman, who is a lawyer, argues it’s worth pursuing.

It was August 11th 2016. With mounting complaints from a watchdog group, The Committee to Rescue Our Hospital, Key West’s City Commission decided to hold a public workshop for all interested parties. Many people were stunned to learn that night that the Stock Island hospital had been built on city owned land. As it turns out we also learned that the town has such a thing as a “hospital district board.”  Its members are appointed by the Governor of Florida. It’s been around since 1967. Under the laws of Florida, the district board has the power to oversee the rates, policies and budgets at its local hospitals. Its mission is to protect the interests of the public when it comes to healthcare.

So, what have all those people been doing for the past 50 years?

Well, in 1968 the City deeded its land on College Road to the Lower Florida Keys Hospital District which opened a hospital there in 1971. In 1999 the District leased the hospital to HMA [Health Management Associates] for 30 years. The rent was a lump sum $20 million that the District would slowly give back to HMA as yearly payments for free “indigent care.” Those payments are now $500,000 a year. In the meantime, according to Bryan Green, LKMC has been operating with one of the top profit margins in the country.

A month after the City’s workshop the same angry crowd met again, this time in front of their newly discovered hospital district board. Now that the light was turned on above the kitchen sink, people including former Judge Payne, now a City Commissioner and Commissioner Sam Kaufman had questions about …well everything.

Had the hospital district board failed to exercise its statutory powers and duties to oversee the hospital’s rates? Did the board members unlawfully delegate their powers to a for-profit company? Did they have the right to lease the hospital to a third party? Have they abandoned the citizens to the jaws of extortionists while our elderly have no choice but to leave town to seek more affordable healthcare?

That night the Board promised to seek an “independent legal opinion” as to its current powers and duties. It hired Maria Currier from the law firm of Holland & Knight to answer those specific questions. This week, while delivering her $25,000 opinion, she reassured the board that it had absolutely no powers and nothing to do.

And that’s where the conspiracy theory begins.

“They didn’t ask about the “reverter clause,” Commissioner Kaufman told The Blue Paper, “Why was the deed from the City not part of the inquiry?” Apparently a “reverter clause” in the deed transferring the land beneath the hospital to the District has been a sour spot ever since the hospital district decided to take HMA’s $20 million.

According to Judge Payne, “the deed does not allow the district to use the land through a third party.” Payne claims the deed explicitly requires that the district use the land itself for hospital purposes or the land would revert back to the City.

Both lawyers on the Commission believe that the Hospital District violated the deed when it leased the hospital to HMA. The City deeded the land to the hospital district with full consideration of the District’s commitment and duty to serve the best interests of the public under the law, argues Commissioner Kaufman. He claims, the City did not give the land to a private company that answers only to shareholders.

Commissioner Sam Kaufman

“If I give you a property and expressly state that when you stop using the property it reverts back to me, how is that not clear?” says Commissioner Kaufman, “There would otherwise need to be an assignment clause.”

However, the list of questions prepared by the District Board as a basis of the legal opinion did not mention the reverter clause controversy. “Not to even address or analyze this deed provision is very strange and speaks volumes,” says Commissioner Kaufman, “Did the District Board not listen to Judge Payne or the City? Did they not try to figure what we were saying? Or is there a purposeful reason not addressed?”

Finally, when one reads the $25,000 ten-page legal opinion it seems that one question is answered to the board’s satisfaction with very little legal support:

Question 2: [Does the District Board have any residual responsibilities left?]

Does the district board still have power to oversee LKMC rates?  Currier concluded that the district is precluded from interfering with setting rates under the state’s “hospital licensing law,” but the argument is as obscure as it appears unsupported.

The District entered into a real estate agreement with HMA.  They signed a lease that does not specify that the board relinquishes any of its statutory powers or duties. Why would anyone assume that the power to oversee rates would be automatically canceled by a lease agreement?

The answer could lie in these three scary words: grand jury investigation. Until now State Attorney Catherine Vogel has declined to convene a grand jury absent positive proof of criminal activity at the hospital. However, Dennis Ward, the newly elected state attorney, argues that a grand jury can be convened even in the absence of the suspicion of criminal activity in cases where the investigation involves a public agency. Mr. Ward publicly criticized Catherine Vogel for not investigating the hospital through the hospital  district whose board members are appointed by the governor of Florida. So the question is: are the Hospital District Board members trying to dodge a grand jury investigation by claiming that according to the latest “independent legal opinion” they have absolutely no powers over the setting of rates and no knowledge about anything going on at LKMC?

Yet the price gouging issue is the most common complaint made by residents:

Karen W says she was scheduled at LKMC for a scan before surgery after a cancer diagnosis. She had to cancel the surgery because she didn’t have $4,500 up front to pay for the scan.  She found a place in Kendall to do the same scan for $200.

Carol N tells a similar story. She was billed $8,839.20 for a cat scan at LKMC and found out later she could have had the same cat scan done locally for approximately $325.


Note: This piece was amended at 9:00 am Friday December 16, 2016

At this time, Blue Paper reporter, Dr. Martha Huggins, is continuing her research of the individual players involved in the privatization of Key West’s hospital as well as the tens of millions being spent by the District for “free indigent care.”

Stay tuned.

Enabling Legislation: click here

Original Lease with HMA: click here

See the legal opinion below.  [Attorneys please comment.]

[gview file=””]


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20 thoughts on “Could the City Take Back the Hospital?

  1. This reminds me of 4-days-dead Lazarus being resurrected from the dead by Jesus in the Gospels – except I don’t see anyone resembling Jesus in this mess.

    I was at the public meeting at the hospital. It was Judge Payne himself who pushed for the Hospital Board to ignore their longstanding lawyer and get an independent legal opinion. Judge Payne particularly honed in on the reverter clause and whether or not the Board still had power over price-setting and physicians allowed to work at the hospital. Legal “experts” at the meeting, including in the audience, Jim Hendrick was one, assured the Board that the independent lawyer would not charge more than $10,000. The Board’s lawyer told the Board the cost would be substantially higher, and this ex-lawyer amend-ed the Board’s lawyer.

    Let me see. The people of Key West want CHS to provide top shelf mainland quality medical care at bargain prices way down here at the tip of nowhere. The people of Key West also want CHS to happily do that while it is being sued by the Hospital Board, the city, citizens, for price gouging, rudeness, lousy ER room care, mistreatment of local physicians, mistreatment of patients, etc.

    I am pretty sure price-gouging by a pubic or quasi public entity, which has a monopoly, which CHS basically has in Key West and the lower Keys, is a crime, which could be prosecuted by the state and/or federal authorities. I am pretty sure padding patients’ bill is a crime, which can be prosecuted.

    But it will take a civil lawsuit to test the reverter clause and the actual power, if any, which remains in the Hospital Board over how CHS runs the hospital. Based on what I’ve heard here and elsewhere, that lawsuit could be brought by the city relying on the reverter clause in its deed to the Hospital Board. That will be a serious legal battle in the courts, local, appellate.

    Might be the hospital wasn’t being run well back when the Hospital Board ceded its authority to HMA for 30 years. Might be the hospital had equivalent problems back then to the problems it has had up to now under HMA and then CHS. Might be a lawsuit, if it succeeds, will trade one devil for another.

    From what I have been reading, CHS is in dire financial straights. If I was the boss of this mess, I would first try to get another mega hospital management corporation to agree to take over the hospital, if CHS can be bought out. Baptist Medical Centers seems the most likely replacement for CHS, since Baptist runs Mariners Hospital above Islamorada, and is Baptist looking at doing same with Fisherman’s Hospital in Marathon?

    If I were the boss of this mess, I would ask CHS how many million$$ it wants to sell its lease back to the Hospital Board, with the city funding the buy out. My goodness, the city forked out $8 million for the Duck Tours settlement. The city forked out $12.5 million for a private developer’s down payment on Peary Court. The city is spending $58 million on a new park on Truman Waterfront. The new animal shelter on Stock Island will cost $5 million. (Comparative shopping prices for baubles, compared to the IMPORTANCE of the city’s hospital.)

    As for the Hospital Board and conspiracy. Well, just because you are paranoid doesn’t mean they aren’t out to get you. The Board wasted $25,000 on what might well be a made as instructed legal opinion. And here we are right were we were before the Board meeting where the Board’s own lawyer told the Board it had ceded all control to HMA and there was nothing the Board could do about the hospital lease HMA sold to CHS.

    Are not things better now at the hospital? That’s what I have been reading in the Key West Citizen? Is the Citizen under the control of CHS, the Hospital Board? Is the Citizen making up that things are better at the hospital? If CHS actually has turned over a new leaf, I have no clue about that, but if that has happened, what’s the point in suing CHS? The Sheriff has offered his helicopter for the hospital to use, instead of the far more expensive private evacuation helicopter.

    Is there still really a problem? A real problem? At the hospital? Is part of the problem people living way down here at the tip end of nowhere feel they should have the same quality medical care and the same prices they would get in Columbus, Ohio, Atlanta, Georgia, Miami Beach, Florida? If so, perhaps they should consider moving there?

    I personally, and people I know, have had excellent dealings with the hospital. It saved my life. It saved by girlfriend’s life. It did that for free, because we could not pay. I have been to the ER rooms several times for other things. I got good treatment there.

    1. Sloan, Lower Keys Medical Center didn’t save your life and your girlfriend’s life for free. Nothing done there is free.Someone else paid. In your specific case, it is especially disingenuous to suggest that you could not pay when you have access to Medicare, Social Security and family wealth. Instead, you choose not to pay over and over and over again.

  2. With this latest “opinion” – and that is all it is, someones $25,000 opinion – THIS IS NOT OVER! As a member of the Committee to Rescue OUR Hospital this is only one more opinion in this dangerous, outlandishly expensive, health care situation that those living in the lower keys must contend and worry with. I attended the meeting when Holland & Knight were selected. Personally I would not have chosen the big name firm, but the Hospital Board thought there was clout behind the name. Of the 3 candidates to investigate the Board and public’s questions and concerns, I would have chosen the last woman. As I recall she was from a small new law firm and did not have the big reputation – but she seemed to me to have passion and great interest in justice that we needed. She was an Erin Brockovich type and her fee was only $10,000 and as I recall, and I think she was willing to do a bite more with the case than Holland & Knight. She worked with non-profits and told the board she would work with their budget and she genuinely seemed interested in the public interest aspect of the case. I sat next to Dennis Ward at that Hospital Board meeting and had a sense he too liked this woman’s passion and presentation. If I still had this woman attorney’s name, I would contact her myself now that we have another large corporate law firm opinion – it is just the opinion I knew would be returned.

    Judge Payne and Commissioner Kaufman still see the same legal problems with past (and therefore present) hospital situation. Some will say the hospital is now playing nice and trying to work with the community and we should move forward. I say we need to look into the legal issues Judge Payne and Commissioner Kaufman have spoken about for some time now. They, our city attorney, and our incoming/returning State Attorney Dennis Ward who has stated one of his first actions will be to convene a Grand Jury – should now all work together to see the public’s best interest, safety and welfare is protected.

    I am also encouraged to see some of the Hospital Board members (Cara and Kathy specifically) are questioning Mr. Fishman’s continued legal services and would like to put his contract out to bid. GOOD! Mr. Fishman’s OPINIONS in counseling the Board, and his “GUIDANCE” over the years are what has created this ugly situation. His “institutional knowledge” is what protects the hospital and its current investors today and what we get is the status quo, ripped off, and dangerous medical situations! Get rid of him and we will begin to solve this problem with the other mentioned public officials in the city, county, and state.

    SO – Don’t think this is over – it is just getting started! That CHS (those managing the hospital with their past obscene profits) state they have no interest in leaving should worry but not surprise any of us. Though they are selling off many of their other holdings, one so profitable as Lower keys Medical Center will be the last they surrender.

    Dr. Martha Higgins, we look forward to your continuing research of this story as well as that of the The Blue Paper. We now look to our City Commission and Mayor, especially Judge Payne and Commissioner Kaufman whose specialty is the LAW and JUDICIAL SYSTEM, Shawn Smith – our City Attorney, and incoming State Attorney Dennis Ward – coordinate your efforts. And stay tuned.

  3. The situation with LKMC is a huge concern for me. We own a home in the Lower Keys and plan to retire there full time next year. If we can’t trust that this hospital will take care of our Medical needs as we age or just in an emergency situation, what are we to do ? Obviously you can’t drive to Miami in an emergency situation. Are there any alternative clinics/ hospitals in the upper keys that can offer better service and fair pricing ?

  4. Section 155.40 was enacted to assure that hospital sales were based on full public disclosure. The disclosure applied to either profit or nonprofit hospitals, which is the plain meaning of the sentence. It in no way intended without comment and in passing to over-rule specific enabling legislation requiring nonprofit ownership, as ours does.

    In 2010 Diane Covan won a case based on this clear-cut reasoning. The District settled when it seemed clear Judge Jones was going to rule against them, and lead to righting the wrong of selling to a for-profit hospital.

    This is the ruling we get for $20,000 from someone who went to the 72nd-ranked law school in the nation. They can have opinions from someone who went to the 1st-ranked law school for free.

  5. “The existing lease is not terminable without financial risk to the District.”

    Being a layman in this matter I hesitate to comment, but the above quote seems to have a lot of bearing in this situation and could be part of the key. So the question, How much financial risk? Answer that and then that will give us some guidance. However, it appears the handwriting is on the wall as far as a solution goes: The present hospital group vacates the premises and Baptist takes over the hospital operations. Win-win for all, and its over and done with – providing that the “financial risk” can be reasonably negotiated.

  6. Ben Volpain –

    If the lease is voidable by the city, or by the Hospital Board, it will be up to a court to void it if CHS does not roll over and die. If the lease is voided by the courts, and on appeal, that’s the end of it, this ex-lawyer thinks, although the legal costs of getting that result might be several hundred thousand dollars in legal fees. The risk here is the city, or the Hospital Board, does what Michael Halpern and City City Attorney Donie Lee, er, Shawn Smith, and Police Chief Donie Lee did at Southernmost House, where they bypassed the contract and just tossed out the management company and its local manager, both of whom might win in the courts and perhaps win big. Any hospital litigation would be long and hard fought, the very thing that led to Halpern taking the approach he took: he was not happy with the court route. That was over a hotel. This is over a hospital. The city, the people here, demand great modern medical treatment at the hospital, and think they will be well received by the very same hospital they are suing? CHS is on the ropes. Try to by the hospital lease from them. $10 million might be darn cheap, given what’s really at stake here, which is not money but bodies and lives and people’s mental health being at risk because the hospital is a local Iraq war zone.

  7. Right, that’s what I’m insinuating – buy them out. Although from what I’ve been told, Baptist doesn’t particularly like to buy , but I was thinking more like $6-$8 million. My thought is mediation, not through the courts which could go on forever.

    BTW, it’s Volpian – not Volpain.

  8. Ben Volpian…

    I agree completely with your approach: Negotiate a deal. As Sloan points out, CHS is “on the ropes”, trying to trim its astounding $15 billion debt. Further, their plans include the shedding of up to 20 hospitals in the near future. The CHS “market cap” has shrunk to less than 25% of what it was earlier this year…with earnings in a deep hole. I think the timing might be right.

    That said, the “price” of a buyout would likely exceed your $6-$8 million by a substantial multiple: LKMC is one of their more profitable properties. Think more in the $25-$30 million range.

    Assuming that Key West might be capable of raising that money, next is determining how the hospital will be run, by whom, etc. Not an easy task, by any means. Do we try to forge a deal with Baptist? On what basis?

    This is not unlike “repeal/replace Obamacare”. Sure! You can change things, but???

    Is Key West really prepared to answer that question?


    1. Interesting that the legal opinion obtained by the board claims that the board is under an obligation to delegate all of its oversight powers regarding operations (this includes rates,
      Budget and doctor privileges) to whatever company it contracts with due to Florida Statutes licencing laws. However, the enabling legislation states clearly that one way the hospital board is permitted to run things is to create a non-profit (a separate entity) to run the hospital and for the board to retain supervisory powers as a board to review and approve rates, budget and doctors’ privileges. One would assume that this non-profit entity would also have to be licensed under the statutes — yet this $25000 legal opinion tells us this is impossible. I’m having a hard time swallowing that one. So,instead of hearing that the 1999 board could have negotiated a better deal we are told that any future contract must also include a total delegation of all oversight powers of the board.
      And $25000 for this not very thorough legal opinion – that didnt even look at the deed – just seems so … well … what do those in the law profession think about that?

      1. Dear Editor,

        I appreciate your response. Sloan is right with regard to these “legal opinions”…anybody can buy one. Still…the overriding fact is that a contract is a contract is a contract. It’s an unavoidable fact. I’m sure that you’ve heard that before. That this contract can be litigated is also a fact. In terms of time and expense, I think that Key West would be ill-advised to pursue this course.

        “Looking at the deed” would provide little solace, in my opinion: That happened almost fifty years ago. Instead, what we’re examining here is the contract between HMA and the Hospital Board negotiated in 1999. Let’s stay on point, eh? 😉

        Did the City of Key West then have a Hospital Board…with an operating budget and staff, capable of overseeing such things as doctor admitting, rates charged for services and operating budget? That’s a rhetorical question. The Hospital Board was charged with the responsibility of addressing those issues in 1999…and they did, by handing them off to HMA. While I might take issue with the Board’s deal, they did what they did…in the best interests of the public at that time. Frankly, the deal probably saved LKMC.

        We must view all this stuff in the context of the times. All this blather about ‘grand jury investigations’ and such should be viewed with skepticism. Similarly, we should apply that same skepticism to all the ‘anecdotal evidence’ that has been bandied about. All this stuff sounds like “conspiracy theories” to me.

        Why can’t we just, for a change, deal with the realities here? Instead of being focused on ‘tearing down’…how can we make things better?


    2. Dickford,

      Again, just looking at this topic with an outsider’s view, but: The lease was $20 million for 30 years, so with 13 years remaining (or 44% of the 30 years), then couldn’t you say for mediation purposes that the lease is now worth (ballpark figures) $20,000,000 x 44% = $8,800,000? And here’s what CHS gets: They get to sell out the present lease for $8,800,000, plus no grand jury and no threat of losing the lease outright.

      A further uneducated opinion would be that it plainly appears that the intention of the [deed] was to ensure that a non-profit hospital should be operating there.

      1. Ben –

        You’re certainly not “uneducated”. Your response makes sense. Cut that out, will ya’? 😉

        I am no more conversant with the details than you are, but I would not hang my hat on some “reverter clause” in the deed. In addition, we must remember that HMA handed over $20 million at the inception of this contract…a contract with a legally-empowered government entity.

        But…that contract came with “strings”…one of which was to annually “pay back” a sum to HMA to compensate for indigent care. As I understand it, that payment amounts to $500,000 currently. I have no idea just how much this “pay back” has cost Key West to date. That said, this deal looks to be much more complicated than a simple “lease”: Frankly, it looks to be more of a bailout than anything else: In effect, the City got a $20 million secured loan…

        Aside from that, this hospital has operated for 17 years under the present agreement: That fact alone leads me to believe that this agreement, however flawed, takes on aspects comparable to an easement.

        As to the price of recovery? Well…think like a capitalist, eh? Make me an offer I can’t refuse.

        And, no…those threats of investigations and grand juries and corruption are silly on their face. Of course, anybody can sue to their hearts content. We’ve seen that before…

        Thanks for your thoughts.


        1. As to the $20 million and how its been spent over the years: We need to remember the “City” is not a party to the lease deal. The City deeded the land over to the hospital district for it to use for “hospital purposes”. There are some City Commissioners who believe the reverter clause in the deed may have been triggered when the district stopped using the land itself and turned it over [with no oversight over operations] to a private for-profit company that proceeded to run it in a way that in many people’s opinion does not reasonably look out for the best interests of the residents. The $20 million is a bit puzzling because [unless I missed something] the lease between the district and HMA says HMA was to pay 10 million up front for rent and no more. The financial documents provided on the hospital district website, however, say it was paid $20 million in rent up front. So the district got either 10 million or 20 million in rent [The other 10 million may have gone from HMA to the owners of dePoo with the 10 million to the district being for rent of LKMC only.] The contract required that the District put 15 million aside in escrow for “reimbursement” for ten years at 1.5 million / year for care of indigent residents at the hospitals [LKMC and dePoo] and $500,000 “reimbursement” for a Primary Care Clinic to take care of indigent residents. HMA was to provide the physical space for the clinic and the manpower for administration of the clinic; the District was to “reimburse” up to $500,000/year to pay for the “participating doctors” who serve clinic patients. So $15 million of [the 10 million or 20 million the district got from HMA] was paid back to the hospital for indigent services long ago and another half-million each year for the clinic for 17 years is another 8.5 million. The 20 million [if it was 20 million] has been spent on indigent care. Now the District comes up with the half million a year from its investment portfolio revenue. I wouldn’t say investigations and grand juries are “silly” in the context of our local hospital – we should remember that it is not uncommon for hospitals to be investigated and fined gazillions of dollars for medicaid or medicare fraud. These particular companies [HMA and CHS] have both run hospitals that were on the other end of federal investigations that led to huge fines for defrauding the federal government. And if the investigation comes up clean then that too would be a good thing as the speculation would cease as to whether or not the hospital did or is doing anything unlawful. But really what local residents are upset about are the following: The billing prices are outrageous as compared to other facilities and the hospital is not ensuring that the doctors they work with accept the same insurance that the hospital itself accepts. Dozens of readers wrote to us about how surprised they were when months after their visit to LKMC – a hospital that had assured them they accepted their insurance – they received bills from MD4ER for services of ER doctors that had been turned down by their insurance companies. There are just a couple of health insurance companies primarily used by residents in the Keys – residents want the hospital to insist that the ER doctors and the doctors who provide anesthesia and radiology accept their health insurance. No one has been looking out for the interests of the residents when it comes to hospital provided healthcare. This has been going on for years and years. It wasn’t until a grassroots group led by Harry Bethel started spending money putting ads in the paper to drum to up awareness that anyone “in charge” blinked an eye. Isn’t that the mission of the government board?

          1. Dear Editor,

            Excellent and illuminating response! Thank you.

            Now, let’s start with your concluding question: Isn’t that the mission of the government board? Is it? Where is a definition of this boards “mission”? What authority does it actually have? The answer(s) to that question dovetail into the “weirdness” of the financial details: Regardless of the actual amounts, when have you ever seen a lease where the lessor pays the lessee? It is that fact that leads me to believe that this whole plan was, essentially, a financial bailout of a failing hospital…disguised as a lease.

            Beyond that, if the City is not a party to the lease deal, then what right would they have to invoke any “reverter clause”? Now, if that were a genuine deed restriction/covenant, they might have a point. But, even there, they would have a fight on their hands.

            As for the chronic complaints over billing, etc.? That is an all too common situation associated with hospitals. I can tell you for a first hand fact that LKMC is subjected to all sorts of oversight…from insurers, certification authorities, Medicare and Medicaid (CMS). Medical billing is a tangled mess, these days…no question about that. Still, people who think they’re being overcharged have the rights to pursue remedies…and, they’ll likely get them. I have…so can you. It’s a tough world out there…and it doesn’t relent just because you’re sick.

            Investigations and grand juries are silly in this context: There is nothing untoward even suggested in all this conversation.

            Ask yourself this: What would happen if CHS just exited the deal? Is Key West (or the Hospital Board)even remotely prepared to accept this possibility?

            That’s a rhetorical question.


        2. Morning, Ben, Dickford and Naja (Blue Paper Editor) –

          After Arnaud Girard scolded me in a dream during the wee hours, for dropping the ball on something he and Naja are running, I crawled out of bed and went online and looked at reader comments under this article and saw your recent comments.

          Revisiting what brought us to this mess will not fix the mess. It dodges trying to fix it.

          Litigation will take forever (it will seem), and no one has a clue how it will turn out.

          Whatever reverter clause is in the city’s deed to the Hospital Board, and whatever that reverter clause says/means, “runs with the land” like a covenant and cannot be abrogated by the Hospital Board, nor by a lease the Board entered into with a 3rd party to run the hospital.

          Litigation will take forever (it will seem), and no one has a clue how it will turn out.

          CHS is in deep shit financially. That creates leverage for the city trying to buy out CHS’s lease. The city should put that at the top of its list of things to do. Ahead of the new $58 million park, for example. Compared to having hospital the people can trust, a new city park is irrelevant.

          Based on what all I have read in the blue paper and in the Citizen, CHS has padded patient bills and has engaged in monopolistic price-gouging. The State Attorney and the US Attorney already should be pursuing those allegations criminally. That would create more leverage for CHS selling its lease to the city.

          Based on what I have seen, read and heard, including attending the Hospital Board meeting at which the Board reluctantly voted to get an outside legal opinion, the Board is impotent and incompetent, and has been so for some time. Only after civil insurrection did the Board even allow citizens to attend Board meetings. Hello?

          Litigation will take forever (it will seem), and no one has a clue how it will turn out.

          Back when the Key West City Commission tookup this mess in Old City Hall, during citizen comments I told Mayor Cates and the rest of the “magnificent 7” that the hospital was the number 1 crises facing the city. I told them THEY were the committee to save the hospital. The city gave the land for the hospital. Each of them, the 7, should choose one whistle blower from the hospital, a doctor, nurse or hospital staff worker, as an adviser, and then do all they could to save the hospital.

          During his comments, Mayor Cates said he was not qualified to do that, and the commissioners were not qualified. The city attorney was told to look into litigation.

          Litigation will take forever (it will seem), and no one has a clue how it will turn out.

          Mayor Cates was overwhelmingly reelected. The city has not filed suit against the Hospital Board and CHS.

          Perhaps the people who want the lawsuit should bring it themselves, as “third-party beneficiaries” of the “reverter” clause in the city’s deed to the Hospital Board.

          Litigation will take forever (it will seem), and no one has a clue how it will turn out.

          Just my redneck justice opinion. Either the city buys back CHS’s lease, or the city lives with CHS.

          1. Sloan,

            Finally! You’ve arrived at the only truly actionable course for the City and the Hospital Board to pursue: Negotiate a deal. Congratulations!

            Despite all the allegations and whatnot floating about, nothing substantive has come to roost that would entice any legitimate prosecutor to initiate/pursue an “investigation”. As we all know, both HMA and CHS have been subjected to significant fines in the past for various misdeeds. But, so has Baptist Health Systems. Florida seems to invite these scams…look no further than the record Medicare fraud perpetrated by Columbia/HCA for particulars. Yet, the CEO of that outfit…wound up as our felon governor.

            You’re right: “Revisiting what brought us to this mess will not fix the mess. It dodges trying to fix it.”

            That said, assuming that Key West can “buy” their way out of this “lease” (or whatever it is)…the hard part awaits: Just what can/will the City do to replace these people? I have no clue…nor, does anyone else.


  9. Ben, sorry about inverting i and a in your last name, I touch type and I am mildly dyslexic and that’s an example of how it can play out typing; that, and likely as not the mistake looks perfectly okay to me when I read it, and even reread it. Later, I might see it and wonder, what the heck did I do that for?

    Editor Naja, the problem with all the legal theorizing is just what I said at the Hospital Board public meeting to people sitting around me after people, led by Judge Payne, started lobbying for an independent law firm to weigh in. A lawyer’s opinion is just that, an opinion. It is not binding on any court. So regardless of what opinion would come back for $25,000, it wouldn’t be worth anything really.

    I see 2 ways be rid of CHS. Pay it to leave. Whatever it costs. Gosh, the hospital operating correctly is worth far more to the city than, hmmm, Peary Court and Truman Waterfront combined. The proof of that wild ass allegation is to imagine the hospital closed. Oh my, the clamor would dwarf the clamor so far about the hospital.

    The other way is to sue CHS and WIN. I have a suggestion for the sue the bastards contingency, which is akin to my suggestion for killing all the lawyers, which is everybody stops using lawyers. Let the people of Key West who want the city and/or the Hospital Board to sue CHS pay for the city/Hospital Board’s legal costs. Let Commissioner Payne lead the charge by donating $50,000 to the city’s litigation costs.

    Nobody pushing for litigation has a clue how it might end. Not a clue.

    The elephant in this here living room is the State Attorney has been on notice for some time that CHS was said to be ripping off patients. The State Attorney got beat and we have a new State Attorney coming in after the first of January.

    Perhaps he will prosecute CHS and its employees who were involved in the alleged ripping off. Going to the top of CHS – its management, CEO and Chairman of the Board. They had to know from the hospital’s extraordinary profit margin that they were stealing from the patients.

    A good old-fashioned criminal prosecution just might encourage CHS honchos to try to make a deal with the State Attorney, which includes CHS renouncing its lease for the hospital. More so, if the US Attorney joined in the criminal prosecution.

    1. Couldn’t agree more that litigation – which is never a great plan – seems especially out of place in this context — but what gets me is that if there is a replacement company – now or later when the lease expires – we have a board that has accepted the concept – without questioning it – that they ARE OBLIGATED BY LAW [some obscure licensing law that does not actually preclude board supervision in its text and that was not quoted in the body of the opinion] to delegate all of their supervisory powers over rates and doctors’ privileges to whatever company it is they contract with. That sets us up for more of the same. Why didn’t the board question that? The support for that proposition in the legal opinion is EXTREMELY weak – it is based in part on speculation that companies “would not be willing” to enter into a contract and take on the liability of running the hospital business if the board retained any oversight over operations. Really? How many businesses can you think of that have to deal with government regulations, with specific guidelines where government approval is required for their operations? I can’t help but think that rates [profit margins] could be capped in a future contract by tying them to a national average and board approval could be required for increases – similar to the Public Service Commission for utilities. I can think of many examples of businesses that function quite successfully in spite of having to deal with government supervision. Taxis are another example. Rates are capped by the City of Key West for Key West cabs. Why is that $25,000 legal opinion acceptable? An opinion that sets things up so that the board will be able to express justification if in all future contracts with whatever company they choose they again refrain from including any sort of board review and approval of rates.

  10. I wasn’t around back when the Hospital Board “farmed out” the hospital to HMA, but from what I have heard and read, the hospital was a mess back then, the old way had not worked, and something different had to be done, and here we are with much the same as Michael Halpern experienced when he farmed out Southernmost House to a hotel management company (HMC) and then decided that had been a big mistake, perhaps because of HMC doing such a good job that its management fee became too high to suit Halpern, perhaps because HMC was running the employees and hotel into the ground. Whatever it was,

    Halpern figured out litigation was not going to get him what he wanted, which was immediate control of the hotel, so he persuaded the city attorney and the police chief, acting under color of law, or perhaps actually under the law, to get rid of HMC, which now is suing the living shit out of Halpern and his accomplices in federal court.

    If the consensus here is that civil litigation is a bad idea, then it’s time to stop adding fuel to that approach. It’s time to man and woman up and say the city needs to buy out CHS regardless of who will then run the hospital: Baptist, the doctors, the Hospital Board. another hospital management company, the city.

    If the new State Attorney Dennis Ward really is tough on corruption, he will prosecute CHS and its responsible officials. He will do it pronto after being sworn into office in January. He will do his best to get the US Attorney General to join in the prosecution. His new Chief Assistant State Attorney appointee Mark Wilson already is a special federal prosecutor working out of the State Attorney Office.

    If. If. If.

    There are so man Ifs in this mess. Perhaps the only way to fix that emotionally is to take the past and present Hospital Board members out on the Schooner Western Union, the city’s beleaguered flagship and keel haul every last one of them backwards in shark-infested waters and be done with them. Perhaps that PURGE will allow for moving forward with solving the CURRENT hemorrhage.

    Good luck, though, getting Baptist, or any hospital management company, to agree to let a citizen Hospital Board determine what prices to charge and what doctors to allow privileges and how to run the hospital.

    The best that can be hoped is a new hospital management company will be a good neighbor and give serious consideration to the Hospital Board’s input.

    Like KWPD was supposed to give serious consideration to the Citizens Review Board’s input, while today the CRB is a KWPD rubber stamp operation, which pleases KWPD, the mayor and city commissioners (except for Sam Kaufman), the city attorney and the city manager.

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