Boca Raton Regional Hospital late last month chose a Coral Gables-based hospital company as a partner, a move that shut out another contender, the Cleveland Clinic, which badly wants a hospital presence in Palm Beach County.
The selection of Baptist Health South Florida on July 26 as the winning partner by the Boca hospital’s board is a blow to Cleveland Clinic.
For the past decade, the Ohio-based medical provider, with a Florida campus based in Weston, has been on a growth tear in Palm Beach County and the Treasure Coast. Cleveland Clinic recently opened a clinic in Wellington and is working on deals to manage or own hospitals in Martin and Indian River counties.
But what Cleveland Clinic really wants is a Palm Beach County hospital, where it could steer patients needing in-patient treatment or surgery. Unfortunately for Cleveland Clinic, its closest hospital is at its main campus in Weston, a long drive to Broward County for most residents of the Palm Beaches.
“This is what we get from our patients all the time,” Dr. Wael Barsoum, president of Cleveland Clinic Florida, has told the Palm Beach Post. “They say they want a Cleveland Clinic here.” Because of state rules, the easiest way for Cleveland Clinic to open a hospital in Palm Beach County is to buy one.
In a statement, Cleveland Clinic’s Ohio headquarters called Boca Raton Regional’s decision “disappointing.”
The search by the Boca hospital’s board at one point featured 12 health care systems, but by May, Boca Raton Regional said it was down to Baptist Health and Cleveland Clinic.
If completed later this year, the partnership will safeguard Boca Raton Regional’s future in the hyper-competitive health care industry. Boca Raton Regional would keep its name but become part of Baptist Health, which has ambitious growth plans in South Florida. In 2017, Bethesda Hospital’s east and west campuses in Boynton Beach merged with Baptist Health, which now counts 10 hospitals in its not-for-profit system.
Boca Raton President Jerry Fedele praised Cleveland Clinic as a global health care provider, noting that its proposal was “very strong.”
But while the worldwide name recognition of Cleveland Clinic could have dazzled Boca Regional’s board, Fedele said the board stayed focused on a partner with a similar, community-minded focus and commitment to its principles.
These principles include a partnership that respects Boca Raton Regional’s relationship with Florida Atlantic University, and the hospital’s robust volunteer program. A continued commitment to philanthropy, including naming rights, and a shift to new reimbursement models also were important factors.
“Baptist had the best ability to deliver on our goals,” Fedele said. “It’s the closest culture in terms of fit.”
Baptist Health released a short statement, noting both hospitals share “not-for-profit values” of quality and service to patients. Baptist would not elaborate further on its growing Palm Beach County presence.
The 400-bed Boca Raton Regional was born out of a tragedy.
In 1962, two children of Boca Raton residents Gloria and Robert Drummond were fatally poisoned. The nearest hospital was Bethesda, 15 miles away in Boynton Beach. Boca Raton neighbors got together, raised money, and in 1967, opened Boca Raton Community Hospital, as it was known then.
Fedele said a Baptist Health partnership will boost Boca Regional’s services, allow the hospital to develop clinical programs. A partnership also provides the hospital with greater access to capital and spreads costs for everything from purchasing to managing patient care.
Plans are in the works to build a $260 million hospital addition that will transform the hospital to all private rooms.
Already, a whopping $100 million has been pledged in charitable contributions toward the seven-story, 278,000-square-foot addition, Fedele said.
Philanthropy is important for hospitals, but back in 2017, Fedele and other hospital leaders realized they needed more. Specifically, they wanted a strategic partner to take the hospital to the next level, noting that stand-alone entities lack the buying power of larger health care systems.
“We can’t stay the same and survive,” Fedele said. “How are we going to honor the legacy of Gloria Drummond to make sure this vision survives? That’s why our new tagline is, ‘Keeping the Promise.’”
Fedele wouldn’t yet give specifics on Baptist’s planned financial contribution, but he said the company has pledged to make a commitment to not only finance the new tower but also invest in clinical programs, with the goal of elevating Boca Raton Regional to a leading academic regional referral center.
Long-term planning is the name of the game in health care, said Michael Feldman, Cushman & Wakefield director in the health care advisory practice.
Hospital companies aren’t looking at patient population five to ten years from now. “They’re thinking in much longer trends than most of us do. It’s a 20 to 30-year horizon line,” Feldman said.
Driving that growth is the ongoing migration to the state of retiring Baby Boomers, who will need more health care services as they age. “We have a well-insured demographic, and that demographic continues to grow every single day,” Feldman said.
With the peak of Baby Boomer retirement still years away, in 2035, “There’s a flood coming down the road,” Feldman said.
Cleveland Clinic is well aware of the state’s population growth trends. It was Dr. Bernie Fernandez, then-president of Cleveland Clinic Florida, who drove the initiative that led to the creation of a clinic at CityPlace in West Palm Beach. (Fernandez now is with Baptist Health.)
In recent years, Barsoum has spearheaded additional growth.
Cleveland Clinic recently opened a 7,500-square foot medical office in Wellington. The office offers primary, cardiology and gastroenterology care. Last month, Cleveland Clinic opened a 73,000-square-foot facility offers specialty care plus outpatient surgery, endoscopy and imaging services. The center seeks to serve not only residents of northern Broward County but south Palm Beach County patients, too.
Richard Rendina, whose Jupiter-based Rendina Healthcare Real Estate built the Coral Springs complex, said Cleveland Clinic is working hard to build its patient base by bringing health care to the customer.
“It’s a great way to plant your flag, with small clinics and larger ancillary surgery centers,” Rendina said. “It’s all about getting into communities and bringing services to them.”
Cleveland Clinic also is making big moves in the Treasure Coast.
In March, Martin Health System in Stuart announced it is exploring becoming part of the Cleveland Clinic health system. In addition, Cleveland Clinic is slated to take over Indian River Medical Center in Vero Beach.
Further expansion in the state is likely, and Cleveland Clinic hinted as much in a statement. “We remain optimistic about our growth opportunities in Florida,” the company said.