The conversion of Lee Health from a public to private nonprofit health care system will become official Nov. 1 after a unanimous vote this week by the Lee County Board of County Commissioners.

Approval by the county commission of the conversion — which was set up by a legislative enabling act in 2023 — means that Lee Health can expand outside of the county, while maintaining its mission to serve as the safety net system within the county providing charity care to uninsured and underserved populations.

The vote came after more than a year of public meetings and several drafts of the mission agreement between the county and Lee Health to determine that the system would continue to provide current programs and services while fulfilling its safety net commitment.

In approving the legally binding mission agreement, the county allowed Lee Health to finalize the conversion through the complete transfer of assets and liabilities of the system to the successor private nonprofit entity, Lee Health System Inc., according to a news release issued by the system following the meeting.

During the public comment section of the Oct. 28 special meeting of the BOCC, Lee Health President and CEO Dr. Larry Antonucci thanked the county commissioners for collaborating with the system to improve the mission agreement.

Dr. Larry Antonucci

“What you have contributed to this mission agreement has made it better than we ever imagined and we’re confident it will lead us to take care of our residents in Lee County regardless of their ability to pay and to ensure that we fulfill the mission with accountability and integrity,” Antonucci said. “Our shared dedication to caring for this community has been and continues to be the driving force of this process. We’ve always been more than just a health care system: We are the safety net for this community.”

Dr. Iahn Gonsenhauser, chief medical officer for Lee Health, told the commissioners that the system had secured the signatures of “99% and counting” of the physicians it employs and said he sees that as a “true vote of confidence” in this process.

“Together, we’re excited about the future of our health system, which will allow us to further strengthen and advance our mission of providing exceptional care to those who need it most,” Gonsenhauser said. “As physicians, we feel privileged to serve our communities and remain committed to delivering the highest quality of care regardless of a patient’s ability to pay.”

In addition to approving the conversion, the BCC approved a resolution allowing the Lee County Industrial Development Authority to be substituted for Lee Health as issuer of its outstanding debt.

The conversion to a private nonprofit ended Lee Health’s ability to issue tax-exempt debt directly, and the system requested that the IDA serve as a conduit issuer for outstanding tax-exempt debt to preserve existing interest rates and tax-exempt status of the debt. Commissioners approved reissuance of assigned indebtedness as qualified 501(c)(3) bonds, not to exceed $850 million.

Prior to the meeting, Lee Health Vice President of Government Relations Michael Nachef said the bond conversion is “simply a conduit” to allow the maintenance of favorable rates.

“The IDA oftentimes offers issuance on bonds for large nonprofits, and in exploring ways that we could address maintaining the most favorable rates on those outstanding bonds, we asked them to support that issuance and they agreed pending the county’s action,” Nachef said. “This would not lead to [any future] tax because Lee Health remains entirely responsible for the balance of that outstanding debt.”

The IDA presentation to the BOCC said the bond conversion “does not obligate IDA, Lee County, the state of Florida or any other political body/agency to levy taxes or pledge any form of taxes to pay principal, purchase premiums or interest under any related documents.”

Following the meeting, one of the most vocal opponents of the conversion, longtime Lee County educator and community watchdog Steve Maxwell, said he was feeling more positive about the final mission agreement between Lee Health and the county.

Maxwell said he thinks county residents can feel reassured about three key elements of the final mission agreement: The county commission will act in an oversight capacity; Lee Health cannot sell off any of its assets without approval; and the safety net commitment by the system must stay in place.

“Those are the three, I think, most important protections for the public, and I think that the county commission listened [to public concerns,]” Maxwell said.

Lee Health board of directors holds final public meeting

The day after the BOCC approved the mission agreement, the Lee Health board of directors held its final public meeting as an elected board to formally authorize conveyance of assets and liabilities to the new entity.

Prior to the conversion, the Lee Health board consisted of 10 elected members. With the conversion from a public to private nonprofit entity, board members will no longer be elected by the community at large.

The current 10 members have all transitioned to the new board and will serve out their existing terms. After that, Nachef said “the board of directors will be self-perpetuating, seeking talent from around the community through similar processes of many other nonprofit boards.”

Michael Nachef

Nachef said the future board could grow to a maximum of 15 members in the future. He said the county commission, while operating in an oversight capacity for the system, will not have a role in the appointment of Lee Health board members.

“The Lee County Board of County Commissioners’ involvement is in enforcing the mission agreement and ensuring the safety net mission of Lee Health,” Nachef said.

The changes to the Lee Health board mean that it will no longer be subject to the state’s Sunshine Law requiring that meetings be public and records — including meeting minutes — be available to the public. Oversight auditing results will be submitted to the BOCC, Nachef said, and will therefore be public record under the Sunshine Law.

With early voting for the 2024 general election underway prior to Nov. 5, Lee County ballots still include selections for the 10 Lee Health board members, with only one challenger — Dr. Joseph Gambino — for one of the two District 5 seats.

Asked about the timing of the board seats remaining on the ballot, Nachef said the conversion process began in August 2023 and has followed the legislatively prescribed timeline.

“The process is entirely independent of any election,” Nachef said. “In District 5, two incumbents and one challenger are currently running for election to the Lee Health board of directors.” With the conversion to a private nonprofit entity, he explained, those elected positions will no longer exist.

Lee Health Media Relations Manager Jaclyn Bevis declined to elaborate on what would happen if the challenger in District 5 were to win one of the seats, reiterating that “those elected positions will no longer exist.”