Tampa General Hospital and University of South Florida Health plan to form a joint venture organization that will bring USF physicians and the Tampa General Medical Group into a single entity.
Details of the affiliation remain to be worked out, but outgoing USF President Judy Genshaft is expected to sign a memorandum of understanding before she retires on June 30, said John Couris, TGH president and CEO.
Couris and Charles Lockwood, USF Health senior vice president, updated the USF board of Trustees Thursday on their planned partnership.
“We’ve already signed a letter of intent, a non-binding LOI, that got everything started. We will have for President Genshaft to review and sign a memorandum of understanding, which brings our relationship closer together, by the end of June. Our definitive documents will get completed over the next couple of months,” Couris said.
The proposed deal comes as Tampa General, the largest hospital in the Tampa Bay area with 1,007 beds, increasingly expands beyond its Davis Islands campus. Couris separately announced a 50-50 partnership with Fast Track Urgent Care that takes TGH into Pinellas County for the first time. TGH also is leasing space inside the new Morsani College of Medicine (MCOM) and Heart Institute that’s under construction in downtown Tampa.
Couris and Lockwood envision a medical district that spans a broad swatch of downtown, including USF’s Center for Advanced Medical Learning and Simulation (CAMLS). The district would extend west on Kennedy Boulevard to University of Tampa, which works with TGH on nursing and allied health. TGH also plans an acute-care rehab hospital on Kennedy.
“We have an opportunity to create something between USF and TGH that’s never been created before,” Couris said. “This district is a proxy for world class quality, world class research. That’s the path that we’re on, and doing it together is critically important for all of us.”
USF, like many academic medical centers, faces challenges, Lockwood said. There’s increased competition from community hospitals and significant pressure from insurance companies and other payers to demonstrate value. Competition for research grants is intense and the cost of medical education continues to grow.
The answer is to create a “virtuous cycle,” including significant investments in clinical practice, Lockwood said. “It’s been estimated by Deloitte that to be a top medical school you have to be part of a $4 billion academic health center. We’re already together at $2 billion and we can grow to $4 billion in the next decade,” he said.
Working in silos is not effective, he said.
“If we work together, if we have a common funds flow and profit margin, we will align our interests in a way that will accelerate the growth of this academic health center and allow us to have a robust funds flow. With that funds flow increasing, we can increase our research productivity, we can increase the economic impact to the community … and in turn that enhanced reputation for clinical and research excellence will bring in more patients, and that increase in patient volume will increase revenue and you’ve created a virtuous cycle.”
TGH already is the primary teaching hospital for USF Health, but the planned joint venture goes a step further. It would be governed equally by TGH and USF Health through a joint affiliation council, and will include USF physicians and Tampa General Medical Group physicians, who are primary care doctors and transplant surgeons. It also will collaborate with private practice physicians who want help with managed care contracting, employee benefits and supplies.
Revenue will come from patient services and a share of TGH’s operating margin. The revenue will flow through Tampa General, which will distribute it back to USF Health, Couris said.
“If we make money, we share that. If we lose money, we take on the risk,” Couris said.
USF trustees were not asked to vote on the deal Thursday. Their approval will be sought later, once details are hammered out. But most trustees seemed to like the plan.
“It’s the right thing at the right time,” said USF board chair Les Muma. “TGH wins, USF wins, but more important the Tampa Bay area wins.”