TMH Request for Change in Governance Structure Leads to Discussion Over Potential Sale

On Wednesday, the Tallahassee City Commission will consider a request by Tallahassee Memorial Hospital (TMH) to establish a new board to govern the TMH’s health operations. The hospital is looking to establish a new Health System Board, which will manage the broader TMH health care system. The request has prompted a discussion about the possible sale of the hospital with FSU as one of the potential buyers.

Hospital Ownership

The hospital, which is now known as Tallahassee Memorial Healthcare, was founded by the city in 1949 and has since grown into an urban, nonprofit, community-based hospital serving a 21-county region across North Florida and South Georgia. The hospital has evolved from a city-operated entity into a nonprofit-managed regional healthcare provider since transitioning to a lease-based model in 1979.

Over the years, TMH has expanded its specialty care services, trauma capabilities, and regional footprint, aligning with national trends where independent hospitals integrate with larger health systems to ensure financial stability and service expansion. 

The City of Tallahassee owns the hospital’s land, buildings, and assets, while TMH operates the hospital as an independent nonprofit healthcare system under a long-term lease agreement. The City owns approximately 75 acres of land and approximately 2 million square feet of building space encompassed by TMH as the lessee. 

TMH recently requested the City restructure the hospital’s governance model and establish a new Health System Board. Under this proposed model, the new board would oversee the broader TMH health system, while the existing TMH Board would continue to manage the hospital’s day-to-day operations. 

Possible Sale

The agenda item published by the city states that “TMH’s expansion beyond Tallahassee and its request to reshape the hospital’s governance structure may necessitate a change in the nature of the current lease agreement. Staff will evaluate the implications of TMH’s request, including evaluating whether continued City ownership remains in the City’s long-term interest. As part of this analysis, staff will also explore the feasibility and potential advantages of a possible sale of the hospital, considering all available options and approaches and bringing back options and recommendations.”

Included in the agenda are letters from FSU and the TMH Board.

The FSU letter, from President McCullough, expresses interest in establishing an Academic Medical Center and details the potential community benefits.

The letter from the TMH Board discusses the benefits of keeping local control of TMH operations and details the benefits of working with FSU on projects like the Academic Health Center.