Jackson Health System loses another $9 million

The Miami Herald

Jackson Health System loses another $9 million

By John Dorschner

For the second month in a row, Jackson Health System lost $9 million in November — losses that executives blamed on Jackson’s inability to reach agreements with its two biggest partners, the labor unions and the University of Miami.“You look at the two big pieces and we’re still in the netherworld,” said board member Michael Bileca at the Jackson board’s monthly committee day on Thursday. Administrators have been negotiating with the unions and UM’s medical school for months and have yet to reach agreements.

Cash on hand is projected to drop to 11 days at the end of December — a level Jackson’s chief executive, Carlos Migoya, called “intolerably low.”

Bileca, a healthcare entrepreneur and state representative, suggested that Jackson executives need to come up with a “worst case scenario” strategic plan to avoid emergency measures if the public hospitals come close to running out of money. “Hopefully, we never have to go there,” he added.

Board chairman Marcos Lapciuc said Bileca made “a very good point.”

The lack of agreements with UM and the unions dominated much of Thursday’s meeting.

Martha Baker, president of SEIU Local 1991, presented the board with what she said were petitions signed by 1,500 employees who complained that the two-week furloughs imposed on most employees by Migoya in November “put an incredible strain on us and has affected service here at Jackson. Our patients deserve better.”

She said employees had filed 200 reports of “staffing discrepancies” since the furloughs began. She cited one example where Jackson Memorial’s emergency room had to refuse patients because of staffing shortages and another time an agency nurse had to be brought in to help an understaffed intensive care unit.

Baker said the furloughs are causing Jackson to lose money, offering an example: a night shift in which many patients could not be moved from the emergency room to hospital beds because of lack of staff, causing Jackson to lose revenue for in-patient care.

Migoya said the furloughs are “absolutely not” endangering patient care. Chief Nursing Officer Ric Cuming said he is watching staffing closely and treating employee complaints seriously, but he said many of the staffing concerns raised by employees were about the “ebbs and flows” that occur in many hospitals.

Chief Financial Officer Mark Knight said the furloughs were necessary in December to keep the system from dropping below 11 days of cash. He said that if budgeted savings from the UM agreement and anticipated labor savings had been realized, Jackson would have broken even in October and November, the first two months of its fiscal year.

Union negotiations are at an official impasse. A magistrate will attempt to work out a compromise. If that effort fails, Miami-Dade’s County Commission will decide employee compensation for the year.

The annual agreement with UM is now in its 10th draft, said Chief Strategy Officer Donn Szaro. He told the board that although UM will accept a reduction of $16.5 million from the $131.7 million that Jackson paid the university in 2011, difficulties remain in finding another $36.5 million in efficiencies that Jackson wants UM faculty’s help in obtaining.

Chief Medical Officer Michael Butler said that about $15 million in specific efficiencies have been found but Jackson and UM leaders are still looking for the rest.

Lapciuc said he remains skeptical of any agreement with UM since it bought a hospital across the street from Jackson Memorial in 2007: “I don’t know how it’s possible to be simultaneously partners and competitors.”

Migoya said that the agreement presently being negotiated won’t resolve all of Jackson’s issues with UM. He said next year’s agreement will be different, based on paying UM doctors’ specific fees for services performed, rather than lump sums for types of services.

Ted Shaw, UM medical center’s chief financial officer, noted that UM has voluntarily been accepting lower payments from Jackson since Oct. 1 even without a signed agreement. He said that “UM is willing to work with Jackson at any time” to resolve problems.

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