Memorial Healthcare welcomes competitor Broward Health’s CEO as its leader. What comes next?

On Wednesday evening, physicians and executives at Memorial Healthcare System watched closely as the board of commissioners went through their regular monthly agenda.

An air of tension permeated the room as the audience eagerly awaited what the new interim CEO of Memorial had to say.

Shane Strum took the podium, and people listened, hanging on his every word.

Memorial Healthcare System had landed in an unthinkable position, and its employees wanted to know what would happen next.

"I think we have a strong team in place. I think we have a lot of opportunities. I am going to make sure we take the time to address everything," Strum told the crowd . "I want to make this clear. I am still the president and CEO of Broward Health and I am the interim CEO for Memorial Healthcare System, but this couldn't be a better opportunity for all of us to get together."

Memorial Healthcare System , a publicly funded network of hospitals, outpatient clinics, and urgent care centers in southern Broward County, sits at a crossroads and in a position no one would have imagined. Its strategic vision for the future will be set, at least in part, by the CEO of Broward Health , a competing public hospital system with a recent history of financial instability and leadership turnover.

Just three years ago, Strum took the helm at Broward Health, straight off a job as chief of staff to Gov. Ron DeSantis. He has navigated the hospital district back to financial stability, installed a hand-picked management team, and boosted public perception.

While Strum transformed Broward Health, however, Memorial, considered more stable and financially secure, sputtered under the leadership of Scott Wester, a healthcare executive from Louisiana who took the CEO job two years ago. Memorial's board said Wester failed to articulate a strategic vision and allowed competitors to enter Memorial's South Broward territory for the first time. Two privately held hospital chains, Baptist Health and HCA Health Florida, now own properties in Pembroke Pines, where they are seeking approval to build free-standing emergency rooms. The recent death of Frank Sacco, Memorial's longtime leader and visionary, highlighted that the system still clings to the culture he instilled but needs a leader who can set its future path, which is expected to include a major expansion of its flagship Memorial Regional Hospital in Hollywood.

On Sept. 11, events at Memorial came to a head, setting in motion a trajectory that has seemed politically impossible for more than seven decades — a collaboration of two giant healthcare districts within Broward County. Memorial's board severed ties with Wester at its Sept. 11 meeting with a year left on his contract. Eight days later, the boards of both hospital systems held emergency meetings and signed off on Strum filling Wester's spot, on an interim basis.

Strum is now both CEO of Broward Health and interim CEO of Memorial.

Many doctors in both systems refer to the action as a "merger, non-merger."

Strum himself described it as a baby step. When asked if this should be considered a merger, he responded: "I don't think that's the plan now. I think what the bigger goal would be is, can we collaborate more? This gives us a real opportunity to work together for the first time."

How Strum moved in

Liz Justen, chair of Memorial's board, said after severing ties with its CEO, the board initially wanted only to know how the two systems could work together and why an earlier attempt to do so had stalled.

"I called Shane and asked him to come to our regularly scheduled meeting on the 16th and talk to us," Justen said. "He came in and was telling us about all the collaborations he was doing in the north and how he was building relationships with the local, the state and the feds and how they were giving him appropriations and he was able to secure money and how he was partnering with everybody, and we were sitting there going, "These are all the things we had been asking our CEO to do.'"

Justen said the rest happened organically. "We asked him if he could find time to do a top-down assessment. And then we said 'Why not be our interim CEO and tell us how we can work together better?'"

Strum is no stranger to Memorial or the politics of healthcare. Although he jettisoned in three years ago to revive Broward Health, years earlier, he had worked as senior vice president of the South Broward Hospital District. He also served eight years as a Memorial board member.

Broward Health Commissioner Paul Tanner said that when an emergency meeting was called, his organization's governing group had no hesitation in signing off on Strum's interim position at Memorial. Broward Health pays Strum $1.3 million a year, and he has declined a salary from Memorial.

"They were in a bind, and the concept is not logistically impossible," Tanner said. "There are single CEOs for much larger hospital districts than this in the private sector."

Tanner said both health system boards want to collaborate more, to find operating efficiencies, create partnerships and seek ways to work together. They had begun that effort just before Wester came on board, and are building a freestanding Emergency Department to operate jointly in Sunrise.

"This is an opportunity that has not presented itself in decades and may not present itself again," Tanner said. "Shane is intimately familiar with both hospital systems. It allows our organizations to advance on joint enterprises that should have been moving faster anyway."

It's all about "healthcare for all"

The origins of the North and South Broward Hospital Districts go back more than 70 years when power players in Fort Lauderdale and Hollywood went to Tallahassee to help find a way to pay for hospital care for indigent patients.

The state Legislature created the two special taxing districts—first the South in 1947 and then the North in 1951—to provide healthcare to residents regardless of their ability to pay. They are funded through insurance reimbursement and property taxes and have the mission to serve everyone in the county needing healthcare. The line between the north and south districts is roughly Griffin Road.

Over the decades, both hospital systems have become huge employers and deliverers of healthcare services, and board positions are coveted governor appointments.

Memorial Healthcare System has 17,000 employees and includes Memorial Regional Hospital in Hollywood, Joe DiMaggio Children's Hospital in Hollywood, Memorial Regional Hospital South in Hollywood, Memorial Hospital West in Pembroke Pines, Memorial Hospital Miramar, Memorial Hospital Pembroke, and numerous ancillary facilities, including a nursing home and urgent care centers.

Broward Health has 11,000 employees and includes Broward Health Medical Center in Fort Lauderdale, Broward Health North in Pompano Beach, Broward Health Imperial Point in Fort Lauderdale, Broward Health Coral Springs, Salah Foundation Children's Hospital at Broward Health in Fort Lauderdale, outpatient patient centers and an urgent care..

Merging the South Broward and North Broward hospital districts would be a complex and lengthy process requiring buy-in from the Florida Legislature. State Sen. Gary Farmer proposed a bill to do so in 2017. "Throwing two districts together with the complexity of the IT contracts, the managed care contracts, the position contracts, the myriad issues of debt is simply not something you can do without a long and deliberative look," lobbyist Ron Book said at the time.

Earlier this week, the South Florida Sun Sentinel asked Strum, "Why not merge the two districts?"

"I think both hospitals would have to be comfortable coming together," Strum said. "I think it's a big step. Look, no one has ever done this before," he said, referring to his new position of being CEO of both.

"This is an opportunity ... we can look under each other's hood and see if we are compatible. Do we want to work together? Do we see potential growth?" he said. "And if everyone thinks there is some good growth potential, they will probably allow us to do a few more bigger projects, and we'll get a few wins on the board. I think if we can prove to the community that we've been successful and a value-add, it opens an opportunity for more ... I think everything is baby steps."

A lot of power in one person's hands

It became clear at Memorial Healthcare System's board meeting Wednesday night that Strum would soon become involved in every aspect of operations. Board members directed him to review building plans, critique contracts and seek new opportunities.

Strum is known for his high energy and long work schedule, traits that will be mandatory to operate two large and growing health systems.

When asked if operating both systems is too big a role for one person, Strum told the Sun Sentinel: "I would think it would depend on the person. I think you've seen massive changes in Broward Health. I think I have built a strong enough team to dedicate time to Memorial at their time of need."

"He certainly has the ability and the energy," said Christoper Ure, wealth manager and former commissioner for the North Broward Hospital District said of Strum.

Naturally, some physicians and politicians expressed concern publicly and privately over putting so much power over healthcare in Broward County in one person's hands. Over the decades, both systems have had their share of infighting, lawsuits, and even Sunshine Law violations. They compete for talent, corporation donations, and patients with private insurance whose reimbursements can help fund those without insurance.

"I see a lot of value in both working more efficiently together. However, when you put more power and control in any one individual, there are pitfalls," Ure said. "It is important for both boards to have the right training wheels in place. There are going to be a lot of eyes on both boards to make sure the interests of their constituents are properly front and center."

Attorney Bill Scherer, former general counsel for the North Broward Hospital District for 20 years, said Strum could now wield power to benefit all Broward residents if he negotiated on behalf of both systems.

"Each is a strong health system, but working together gives them great buying power and borrowing power," Scherer said. At a time when more for-profit hospitals want to expand in Broward County, this collaboration becomes even more critical, Scherer notes.

Scherer believes a full merger should be on the table. "There are complexities there ... and they would have to figure out how to do it, but I think Shane is up to the task."

The future for Memorial can take varied paths

For decades, Frank Sacco led Memorial with a strong vision and a long-term plan. Well past Sacco's retirement , the system continued to expand and improve. It opened a new free-standing cancer center in Pembroke Pines earlier this year and completed a four-story expansion at Joe DiMaggio Children's Hospital in November 2022. Memorial also announced in 2023 that it would invest $88 million in Memorial Regional Hospital to upgrade its infrastructure, including renovating its Emergency Department and creating a family birthplace.

Now, the hospital system faces "what's next?"

How does it continue to serve residents in South Broward and keep new competition from luring its paying customers?

Mark Greenspan, Memorial's vice president of construction and property management, said Memorial has two free-standing Emergency Departments in the works — one in Miramar and one in Pembroke Pines. Memorial also purchased a building in Pembroke Pines for urgent care, directly across from the property HCA bought in Pembroke Pines. HCA wants to build a free-standing Emergency Department, its first foray in South Broward.

Most significantly, Greenspan said he has been working on designs for what could be a $750 million expansion at the flagship hospital in Hollywood. He calls it a five-year project that would add a new tower with modern medical technology to Memorial Regional, which opened in 1953. "I have been asked to work with Mr. Strum and bring him up to speed," Greenspan said.

Justen, the board chair, said Memorial is financially strong. However, as the board considers further expansion, it wants a strategic growth plan that includes how to finance new buildings.

"Shane has turned around the north district. We don't need that kind of a turnaround, but we do need a plan going forward."

Justen said the board will not conduct a CEO search for now, although she recognizes they still need to "flesh out" any language concerning conflict of interests that may arise between the two districts.

"In the interim, I am pretty confident Shane is going to be able to lead us," she said. "He knows both systems now. He knows the Memorial family experience. I have no doubt there will be challenges and opportunities, but I feel like we can navigate it together."