Frequently Asked Questions

A community-focused nonprofit means that Lee Health will continue to put the needs of our community first. Our mission of providing care to the residents of Lee County, regardless of their ability to pay, remains paramount for our health system. As a nonprofit, we would continue to reinvest any gains we make to improve the services and care for our patients and community.  

We would operate the same as most other nonprofit health systems you may be familiar with, such as Johns Hopkins, Mayo Clinic, Mount Sinai Medical Center in Miami and Tampa General Hospital. The principal difference would be that we would not be regulated by our state Enabling Act, which confines the definition of “community” to Lee County. 

No. One of the key reasons we are conducting this evaluation is to ensure we are well-positioned to continue fulfilling our community-centered safety-net mission of caring for Lee County residents regardless of their ability to pay, just as we always have.

At the Nov. 17, 2023 Lee Health Board of Directors meeting, the board members took a unanimous vote affirming that our current Mission, Vision and Values would remain in place if conversion to a community-focused nonprofit structure is pursued and approved in the future.

Further, the Kaufman Hall report confirmed that “Regardless of whether a potential conversion is effectuated, the Lee Health Board and management maintain that the highest priority is protecting the system’s safety net mission” (p. 24).

Absolutely not. It is important to know that Lee Health and its leadership are not considering converting to a for-profit structure, and we have no interest in selling Lee Health to another company now or in the future. One of the primary goals of our structure evaluation is to determine if converting from a special district/government nonprofit structure to a community-focused nonprofit structure would strengthen Lee Health’s ability to remain nonprofit and independent for decades to come.  

Unlike nonprofit healthcare providers that operate for the sole purpose of caring for the communities in which they are located, for-profit healthcare providers generally exist to generate profits for their owners or shareholders, most of whom live in other places. Instead of reinvesting excess revenue back into improving care for the community, for-profit healthcare providers often take precious healthcare resources out of the communities they serve. Here are some other differences between nonprofit and for-profit healthcare providers:

No. Although direct support from tax payors is common for public special district/government health systems like Lee Health, Lee Health does not receive direct tax support to fund its day-to-day operations. 

The Kaufman Hall assessment confirmed that Lee Health is “the only hospital district in Florida that does not financially burden its community” (p. 10).

Yes. After receiving the Kaufmann Hall Evaluation Findings report, which recommends proceeding with conversion evaluation, and weighing the pros and cons of such, the Lee Health Board of Directors voted 9-1 to proceed with the conversion of the health system to a community-based structure. The Board, along with the Lee Health leadership team has concluded it is the right step to preserve our financial sustainability, independence and community-led structure long term, while ensuring our ability to be a trusted partner, empowering healthier lives through care and compassion.

In 2023, the Florida Legislature made changes to the Lee Memorial Health System Enabling Act outlining the process that our Board of Directors must follow to evaluate Lee Health’s structure and determine if reverting back to a community-focused nonprofit structure would provide greater benefits to Lee County residents and our organization.

A lot has changed in how healthcare is delivered and paid for since Lee Health became a special district/government entity in 1968. With dramatic change sweeping across the healthcare landscape, Lee Health has a responsibility to explore opportunities and paths that will ensure we can continue meeting the growing needs of our community, including evaluating our current structure to determine if it is still the best option for Lee Health and our community.

• Increased Competition and Constraints on Growth: In 2019, Florida repealed significant portions of its long-standing Certificate of Need (CON) program. The repeal made it easier for most health systems to expand their services. Subsequently, 65 new hospitals were announced to be built in Florida between 2020 and 2022. However, Lee Health has been excluded from this expansion because there are limitations to what geographic region we can operate in (Lee County and as defined in the Enabling Act).
• Growing Financial and Operational Pressures: Health systems across the country are facing historic financial challenges. As expenses grow faster than revenue, many health systems are operating at a loss. While Lee Health has managed a gain from operations most years and has reinvested those funds back into services for our community, we are not immune to the rising costs and declining reimbursement. Lee Health must evaluate the best way to remain financially strong.

Additionally, the Kaufman Hall report notes that “The increased pressure from the political landscape is diminishing certain benefits of operating as a governmental entity

• Congress continues to propose changes or reductions to supplemental payment programs that allow safety net providers additional funding to serve those most in need.
• Both the Florida House and Senate…advanced similar bills focused on increasing the liability limits for governmental agencies with sovereign immunity” (p.13).

For these reasons, returning to a community-focused nonprofit structure from our current special district/government structure would result in greater benefits for the residents of Lee County. 

While the decision to convert will not be voted on by Lee County residents, conversion would require formal votes by two publicly elected bodies, including Lee Health’s Board of Directors and the Lee County Board of County Commissioners (LBOCC). The Florida Legislature authorized Lee Health’s publicly elected Board of Directors to decide whether it is in the best interest of Lee County residents to transition Lee Health from a special district/government health system to a community-focused nonprofit entity, and the terms of a deal must be approved by LBOCC before conversion could occur.

Lee Health will finalize a Mission Agreement with the Lee County Board of County Commissioners over the next several months in order to ensure Lee Health continues to be the safety-net provider for Lee County, caring for patients regardless of their ability to pay. Both Lee Health and Lee County will post the final draft of the Mission Agreement to their websites. Lee County will host a public meeting and formal votes by the Lee County Board of Commissioners and the Lee Health Board of Directors are required to complete the process. 

We have established a single point of truth on our public website, www.LeeHealth.org/LookingAhead, to house all the latest conversion evaluation process updates and resources we have available. We’ve also included a detailed timeline and an evolving and growing list of answers to frequently asked questions (FAQ). Please check back regularly as new updates and FAQ are added often.

Based on what we know today, we have no reason to believe that conversion would change the day-to-day experience of employees at Lee Health or anyone’s current role.

Furthermore, the report along with Lee Health management finds that “The employment status and benefit programs for Lee Health employees would be substantially similar to the existing programs today” (p. 17).

Based on what we know today, we have no reason to believe that a change in our structure would have any impact (positive or negative) on team member salaries or wages. We will continue to set salaries and wages just as we do now, which is based on the specialized skills necessary for each position and what is needed to be competitive in the marketplace.

As community-focused nonprofit health system, Lee Health would continue to operate a 403(b) plan, just as we do today.

The Kaufman Hall report confirms that “Employees would transition to a new employer entity, which will result in the transition of certain programs such as the health plan offering, 403(b) plan, and 457(b) plan. The transition of these plans would not significantly alter employee benefits” (p. 17).  

For those who participate in Lee Health’s 457(b) plan, the conversion would serve as a qualifying event to transition existing 457(b) plan funds to an alternative investment vehicle, of which there are many options available (e.g., 401k or IRA) that support similar objectives of tax-advantaged savings. No 457(b) plan funds will be at risk in the event of a conversion. Our goal would be to provide an alternative supplemental retirement benefit in place of the current 457(b) plan. As always, we would communicate any changes transparently and well in advance so plan participants can prepare accordingly.

As stated in the Kaufman Hall report, “The employment status and benefit programs for Lee Health employees would be substantially similar to the existing programs today. Employees would transition to a new employer entity, which will result in the transition of certain programs such as the health plan offering, 403(b) plan, and 457(b) plan. The transition of these plans would not significantly alter employee benefits” (p. 17). 

Because the Public Student Loan Forgiveness Program is offered to borrowers employed by nonprofit entities, Lee Health would remain a qualifying employer for this program and employees would remain eligible to participate in the programs that exist today.

Both special district/government nonprofit and community-focused nonprofit organizations may participate in the National Health Service Corps Loan Repayment Program. As a community-focused nonprofit, automatic eligibility to participate would end and Lee Health would be required to apply for approval to participate. There are a variety of ways an organization can be deemed eligible to become an NHSC-approved site. Our evaluation process will include a review of all the ways Lee Health could continue as an eligible NHSC-approved site.

Conversion is unlikely to impact the likelihood of unionization. This is because members of Lee Health’s leadership team understand the importance of listening to, valuing and being responsive to team member and clinician ideas, concerns or requests, as well as creating a safe and empowering environment. Lee Health has a long legacy of collaborative leadership, and this type of leadership is at the heart of our ExceptionalLee Promise, which is a promise that every member of our leadership team, team members and clinicians make to our patients, their families and each other.

No. Lee Health would continue to ensure the rights of its team members and clinicians are honored and protected, just as we do today.

Recruitment for physicians is challenging throughout the industry. Lee Health’s recruitment efforts must remain strong whether Lee Health is a special district/government health system or community-focused nonprofit health system. Regardless of our structure, Lee Health must continue to offer compelling reasons people should join our team, including a caring and supportive culture and competitive compensation.

Additionally, the Kaufman Hall assessment finds that “A private nonprofit corporation structure may enhance Lee Health’s ability to recruit physicians due to increasing patient volumes from the removal of geographic restrictions and increased access to shared savings and profit-sharing models”(p. 46).

No. The medical staff bylaws in effect at the time of a conversion will remain the same and, therefore, the amendment process is not impacted by a conversion. Nothing in the law allows for a unilateral change in bylaws triggered by a conversion to a community-focused nonprofit health system.

While it is too early in the evaluation process to know for sure, conversion would have no direct impact (positive or negative) on compensation as the Anti-Kickback Statute, Stark Law and Fair Market Value standards will still apply.

The Kaufman Hall report finds that conversion and the removal of geographic restrictions could increase “access to shared savings and profit-sharing models using non-PPPS and value-based arrangements” and provide an “opportunity to employ physicians in a separate group practice entity, allowing potential profit-sharing arrangements and moderating operational and regulatory risks” (p. 48).

Contracts would need to be reviewed on a case-by-case basis to determine assignability of the non-compete clauses.

Yes. Sovereign immunity would no longer apply to Lee Health or our employees.

• Current Special District/Government Structure: As a public health system, sovereign immunity provides Lee Health legal and financial protections for our organization and our employees. Sovereign immunity requires that any negligence lawsuits must be brought against Lee Health and not against any of its employees. For Lee Health, potential damages are limited to $200,000 per claim with an aggregate limit of $300,000.
• If Lee Health Converts to a Community-focused Nonprofit Structure: Currently, Lee Health has a self-insured program combined with insurance protection for claims that exceed the sovereign immunity limits for covered losses (described above). If the Lee Health Board of Directors decides to pursue conversion to a community-focused nonprofit structure, we would modify and expand our insurance program to protect our organization and employees from personal financial liability in the same way they are protected today, without deduction or impact on employee compensation. We would also continue to provide tail coverage, just as we do today.
• The Kaufman Hall report affirms that “Lee Health currently obtains insurance for added protection above sovereign immunity; Lee Health management anticipates increasing its current coverage to ensure employees and providers are protected similarly to the current status quo” (p. 50).