The public hospital in DeSoto County weighs its options. Merger, affiliation and sale are all on the table.
By Kara Newhouse/Suncoast Searchlight
Original Air Date: July 30, 2025
Host: Rural DeSoto County is already facing a doctor shortage. But now, in the wake of the Trump administration’s Medicaid cuts, the only hospital is facing financial uncertainty. Kara Newhouse with Suncoast Searchlight reports on how hospital administrators are weighing their options.
Kara Newhouse: In DeSoto County, where cattle pastures and orange groves stretch for miles, a doctor shortage already makes access to basic care a challenge. But now, the only hospital is facing deep uncertainty.
The 49-bed DeSoto Memorial Hospital in Arcadia issued a request for proposals that could lead to new ownership or outside control. This comes as looming Medicaid cuts and a wave of rural hospital closures leave communities like this one increasingly vulnerable.
The hospital’s RFP, which was first reported by The Arcadian, invites bids for a long-term lease, merger, joint venture, affiliation or outright sale to another health care organization. Proposals are due October 1. At least four health care organizations have requested tours since the RFP was published at the end of June.
DeSoto Memorial is weighing new management options as rural hospitals face mounting strain. Photo by Kara Newhouse via Suncoast Searchlight.
DeSoto Memorial’s operations fall within a special-purpose government district led by a nonprofit board.
CEO Vince Sica said in an email to Suncoast Searchlight that the hospital board will evaluate proposals based on what’s “in the best interest of the community” and how each plan would affect staff and the delivery of care.
Sica said the move isn’t driven by an immediate crisis. Talks began six months ago when a large health system approached the hospital about joining their organization. Still, the timing—coming just as Congress approved steep cuts to Medicaid—underscores the growing pressure on small, rural hospitals and raises questions about how long facilities like DeSoto Memorial can remain independent.
President Donald Trump’s “Big Beautiful Bill” reduces Medicaid spending by close to $1 trillion over 10 years, according to the health news and research outlet KFF. In the wake of the bill’s passage, worries of hospital closures have rippled across rural America, where high poverty means many residents use government insurance programs or are uninsured.
At DeSoto Memorial, about one in five patients are covered by Medicaid, Sica said. A reduction of that revenue could exacerbate an already challenging economic landscape that includes rising costs, small population and a gap between the cost of care and insurance payments.
Sica explains: “There are very few independent rural hospitals in Florida and it is becoming difficult to operate. Supply costs are increasing, wages and salaries continue to increase, maintaining a productive staff is difficult in a rural location, (there is an) aging workforce and the cost of replacing capital equipment continues to rise.”
Photo by Emily Le Coz via Suncoast Searchlight.
The hospital is not just a critical source of medical care in DeSoto County—it’s also one of the area’s largest employers, with a full-time non-contracted staff of around 200. In a community where economic opportunities are limited and many residents live below the poverty line, its future carries weight far beyond the emergency room.
Keith Keene is an Arcadia City Council member and a former official with the Florida Department of Health.
Keith Keene: I would hate to see any of that affected.
KN: Still, Keene said he understood the hospital board’s reasoning for considering a change.
KK: I don’t have mixed emotions about them doing that because I really think, through collaboration, we are able to provide the best services for our community.
Photo by Emily Le Coz via Suncoast Searchlight.
KN: The question of who will ultimately run the hospital comes as DeSoto County already grapples with limited access to care.
A recent report from the Health Planning Council of Southwest Florida identified DeSoto County as having a shortage not only of primary care providers. There’s also a mental health care shortage for all residents and a dental care shortage specifically affecting low-income and migrant farmworker residents.
Hospital board members did not return Suncoast Searchlight’s calls and emails seeking comment for this story. Neither did the other Arcadia City Council members or most DeSoto County Commissioners. Commissioner Judy Schaefer said she wasn’t aware of the request for proposals and did not have a comment.
DeSoto Memorial stands on the northeastern edge of Arcadia, just before the town gives way to farmland and flat stretches of rural highway.
Photo by Emily Le Coz via Suncoast Searchlight.
Built in the 1960s, the original facility has weathered hurricanes, economic downturns and decades of shifting health care policy—all while serving as the only hospital in a county of roughly 35,000 people.
Over the years, it has modernized facilities and added services. But its role in the community has remained the same: a place to treat emergencies and receive care without driving 30 or 40 miles. For many residents, it’s the first call in a crisis.
DeSoto Memorial offers a broad range of medical services for a rural facility, including emergency care, respiratory therapy, diagnostic imaging, lab testing and an in-house pharmacy. But it lacks some of the medical specialties typical of its larger peers—like labor and delivery. Hospital spokesperson Sarah Hipp told The Arcadian that merging with an outside organization could help attract specialists and a wider scope of care.
Local residents have long backed the hospital, both in spirit and at the ballot box.
Mac Martin is a real estate agent in Arcadia.
Mac Martin: It’s a good hospital. They get good ratings. Recently, my mother was there for a week and got excellent care.
KN: After Hurricane Charley in 2004, DeSoto Memorial received a $20 million USDA loan to rebuild. In 2014, voters approved a half-cent sales tax to help pay off the debt. The “indigent care” tax will expire once the mortgage is paid, or in August 2036—whichever comes first. Hospital officials expect to pay it off in or before 2029.
But the hospital’s financial footing has been uneven. According to a recent audit, it posted a half-million-dollar operating loss in fiscal year 2024. That was an improvement from the previous year’s $3.6 million deficit. Sica said the improvement came from an uptick in patients and reduced use of contract labor, such as travel nurses.
He said it’s too early to tell how Medicaid cuts will affect hospital revenue going forward.
Photo by Emily Le Coz via Suncoast Searchlight.
Even before the cuts, Medicaid payments only covered about 67% of DeSoto Memorial’s actual cost of services, according to the CEO. Sica said that, over many decades, Medicaid and Medicare have consistently paid hospitals less than the cost of care.
That shortfall is among the reasons that independent physician practices have increasingly moved into hospital networks to stay afloat, according to Florida Hospital Association President and CEO Mary C. Mayhew.
“Many hospitals now—and most definitely rural hospitals—they play this much more expansive role of preserving access to physician practices.”
But it’s hard for hospitals to cover the cost gap through revenue from patients with private insurance. Especially in rural communities, where patient volumes are low.
In 2023, a greater share of rural hospitals had negative margins compared with urban hospitals, according to KFF. Rural hospitals with at least 200 beds and high occupancy rates that were part of a bigger hospital system tended to have better finances than other rural hospitals.
Mayhew said that, as Medicaid patients in DeSoto County and elsewhere lose coverage in the coming years, hospitals are likely to see an increase in uninsured patients. That will increase charity care costs.
Tomorrow, the DeSoto Memorial Hospital board will hold a special public meeting to allow comments on the potential change. That’s this Thursday, July 31 at 5:30 p.m. in the hospital’s McSwain room and on Zoom.
This has been Kara Newhouse with Suncoast Searchlight. To read the full report, go to suncoastsearchlight.org/desoto-county-memorial-rfp-sale-merger-medicaid.
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