In a move that could have large implications for the state’s scientific research centers, Gov. Rick Scott has sent strongly worded letters to the University of Miami and two other cancer research facilities warning them they can’t make money from expanding their brands if they want to continue to receive state funds.
Scott’s letters to UM’s Sylvester Comprehensive Cancer Center, the H. Lee Moffitt Cancer Center in Tampa and the Shands Cancer Hospital in Gainesville say that organizations receiving state biomedical research funds “may not franchise their name or brand to other private entities” and “may not receive royalties or other remuneration from other entities in exchange for use of their name or brand.”
The letters are part of Scott’s larger goal to create a statewide funding policy for cancer research centers, Scott spokesman Lane Wright said in an email this week. The letters, dated May 10, note that Sylvester and Shands each received $7.5 million from the Legislature this fiscal year. Moffitt received $5 million.
A former chief executive of the for-profit HCA hospital chain, Scott has previously expressed concerns that government-owned hospitals have unfair advantages over for-profit and nonprofit hospitals.
The letters extend this concern to nonprofit cancer research centers. Scott told the facilities that he wanted “a robust and competitive environment” in the area of cancer treatments and “a fair and balanced playing field for all institutions.”
As “requirements” for future funding, Scott gave three conditions: not franchising the center’s name, not receiving royalties for such branding and reporting any partnership to the Department of Health.
“Future eligibility to receive state biomedical research funds will be contingent on compliance with these terms. These conditions are not meant to be punitive or stifle innovation,” Scott wrote, “but rather to foster a healthy and viable climate for growth and development in the area of biomedical research and cancer treatment in Florida.”
When contacted about the letter by The Miami Herald, the cancer centers responded cautiously. UM said it “is deeply grateful for Gov. Scott’s commitment to cancer research and treatment. We look forward to joining the state’s other cancer centers in working with the governor to improve cancer care for all Floridians.”
Shands officials said they have had a “positive discussion” with Scott’s staff and “are continuing to work toward our common goal of making Florida a destination for the latest in cancer research and care.”
Moffitt officials said they look forward to meeting with the governor, adding: “As the only Florida-based National Cancer Institute-designated Comprehensive Cancer Center we have a unique role to reach out to doctors, hospitals and health organizations around the state to fulfill our legislative intent to serve as a statewide research institute and to perform a statewide function.”
Most state healthcare experts generally consider Moffitt the most aggressive of the three in expanding its Tampa base. In South Florida, Moffitt has alliances with Broward Health and Baptist Health South Florida.
A spokeswoman for Broward Health, the public hospital system in northern Broward County, said the hospitals pay Moffitt a fee that “covers things such as access to expert clinicians and a wide variety of sub-specialists and opportunities for partnerships on educational offerings. Broward Health does not pay them for branding or franchising.”
Baptist spokeswoman Amanda Gonzalez said the South Miami-Dade system participates in Moffitt’s Total Cancer Care Program “for research, but do not have any sort of paid licensing agreement.”
But such affiliations keep growing, and that could have sparked Scott’s concern. “If you look at what is happening throughout the nation, hospitals are affiliating with academic centers to create opportunity for access to clinical trials/protocols” as well as highly specialized care in difficult cases, noted Alan Levine, an executive with the Naples-based hospital chain Health Management Associates who was on Scott’s transition team after his election.
There are some indications that hospitals are thinking about extending their brands to make more money. For example, PricewaterhouseCoopers, a consulting firm hired to help turn around the struggling UM medical school, noted in a February report on The Future of Academic Medical Centers that one way to improve revenue is to “become part of a larger community network,” extending the brand by partnering with community hospitals.
Peter Young, a healthcare consultant in Fort Myers, points out that a long history already exists in Florida of public-private partnerships — such as sports stadium financing or the state’s $300 million investment in the Scripps Florida research facility. But he says Scott’s letter indicates such partnerships are now “seemingly unacceptable in cancer research.”
Near the end of the two-page letter, Scott noted: “I will be asking our partners in this field to come together over the next several months to develop a comprehensive cancer policy to further elevate Florida’s ability to fight this disease.”
Spokesman Wright said the governor’s staff has started meeting with cancer centers to discuss coordinating funding but hasn’t yet established a formal work group.
Wright said that this year the state is spending $41 million on cancer research, with $20 million going to UM, Shands and Moffitt and the remainder going to other institutions. “We would like to establish defined long-term goals and strategies, as well as coordinating performance measurements.”
Stephen Dresnick, a Miami healthcare consultant, called the letters a “very clever” move that could be the opening shot in a new move to turn the Florida research world “upside down” and provide more funds for the state. He said Scott’s move might make sense if he is headed toward a policy of the state “recouping some of the money” it invests in research. He points to Florida State University, which has received more than $200 million in royalties after one of its researchers made the breakthrough that led to the cancer drug Taxol. With the state hard-pressed for revenue, why shouldn’t the state’s general fund get the benefits of the state investments in research? Dresnick asked.
Levine, the hospital executive, said he thinks the governor simply “wants to have a conversation” about creating “an organized strategy for attracting more research and leveraging the dollars to compete with other states for federal research funding.”
But Young, the Fort Myers consultant, said that if the governor truly wanted support for a coordinated cancer policy, it “would have been more invitational,” rather than warning that the facilities could lose funds if they don’t follow his instructions.