Lee Health leadership approves conversion to nonprofit status in structural overhaul

by | Jun 17, 2024



Lee Health’s Board of Directors voted to transition the healthcare system from a governmental entity to a non-governmental nonprofit organization to enhance financial stability and operational flexibility, following an advisory firm’s recommendation.


Lee Health’s Board of Directors voted last week to transition the healthcare system from a governmental entity to a non-governmental nonprofit organization, a move aimed at enhancing financial stability and operational flexibility for one of Florida’s largest healthcare networks.

The 9-1 decision follows an evaluation by healthcare advisory firm Kaufman Hall, which highlighted persistent “systematic, operational, strategic, political, and financial challenges,” suggesting that a transition to a non-governmental nonprofit structure could better equip Lee Health to address these issues and secure necessary resources.

“Over the past year, Lee Health has been assessing the benefits and considerations of converting to a community-focused nonprofit health system to determine if a new business structure would better serve the residents of Lee County,” the healthcare system said on its website.

Lee Health, which employs nearly 16,000 staff members and handles more than 2.6 million patient encounters annually, currently operates as a public entity governed by a publicly elected Board of Directors. This structure, however, has limited its ability to expand and adapt, particularly following the partial repeal of Florida’s Certificate of Need program in 2019. The repeal facilitated the establishment of numerous new hospitals, but Lee Health’s enabling legislation restricted its concurrent expansion efforts.

Under the new structure, the governing board will shift from publicly elected officials to appointed members. This change is designed to enhance operational efficiency and decision-making capabilities. The transition has garnered support from Lee Health’s leadership, who believe it will position the healthcare system to better meet the evolving needs of the community.

The transition also involves a contractual commitment to maintain Lee Health’s role as a safety-net provider, ensuring care for patients regardless of their ability to pay. This aspect is crucial for the community, as it formalizes Lee Health’s commitment to serving the county’s most vulnerable residents.

The legislative framework for this transition was established by House Bill 227, passed by the Florida Legislature in 2023. The bill established a process for converting Lee Health into a non-profit entity and mandated that provider submit a detailed plan outlining the transfer of assets and liabilities and resolving debts. It also stipulated that current members of the Lee County Board of County Commissioners cannot serve on the board of the new nonprofit entity, although current or former system board members may do so.

The next steps involve finalizing the Mission Agreement with the Lee County Board of County Commissioners over the coming months, followed by formal votes from both the County Commissioners and the Lee Health Board of Directors. This process aims to ensure a smooth transition and uphold the commitments made to the community.

“We look forward to finalizing the 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, and conducting formal votes by the Lee County Board of Commissioners and the Lee Health Board of Directors to complete the process,” Lee Health said.

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