The City of Tallahassee (Fla.) is evaluating a potential sale of Tallahassee Memorial Healthcare property after hospital officials proposed governance changes that would reduce municipal oversight, the Tallahassee Democrat reported March 21.
TMH, a nonprofit community-based health system, anchored by a 772-bed hospital, serves a 21-county region in North Florida and South Georgia. It is seeking to establish a new health system board without “city confirmation authority” while maintaining its existing board for daily operations, according to the report. Leaders argue this change is necessary for continued growth and new partnerships.
“Over the years, TMH has evolved from a single hospital into a regional health system … through new affiliations, joint ventures and expanded healthcare services,” Stephanie Derzypolski, chief communication officer for the system, said in a March 21 statement shared with Becker’s. “This growth requires a governance structure that reflects the broader scope of our operations beyond the City of Tallahassee and the physical footprint of Tallahassee Memorial Hospital, as defined in the lease agreement.”
However, the city’s response has sparked a broader review of TMH’s ownership structure, according to the Tallahassee Democrat. A staff report suggests assessing whether city ownership remains in Tallahassee’s best long-term interests, including a possible sale of TMH’s land, buildings and assets.
Tallahassee has owned TMH’s assets since its origins as a city-run facility in the 1940s. In 1979, the city leased operations to TMH as a nonprofit entity, retaining ownership while TMH manages hospital functions with a nominal lease of $1 per year.
“It is important to note that this governance update does not alter the city’s ownership of the property or TMH’s responsibility for operating the hospital and its related facilities,” according to the health system. ”Our request to the city was solely to confirm updates to our governing documents, as outlined in the provisions of the lease.”
The issue will be discussed at a March 26 city commission meeting.
