The Miami Herald

Jackson Health System, UM headed toward “a completely new relationship”

By John Dorschner

Leaders of the Jackson Health System and the University of Miami are developing a plan that will dramatically alter their sometimes testy relationship by creating a clear dividing line between UM doctors who work at Jackson and those who work for UM’s own health enterprise.Under the plan, Jackson would “lease” some faculty doctors, paying the medical school for their salaries. Those doctors would work exclusively for Jackson, and Jackson would get any insurance payments made for their work.

“We can build a new Jackson with physicians for our needs,” said Donn Szaro, Jackson’s chief strategy officer. The plan will create a “completely revised, new relationship” that “will get us away from arguing.”

William Donelan, chief operating officer of the medical school, said it was too early to say how the specialties and doctors will be split between the two large institutions, but he acknowledged “we’re going to have to do this in a different way” from what’s been done in the past.

Szaro, who outlined the plan at a Friday Jackson board meeting, said the new arrangement was intended to untangle the complex relationship between two of South Florida’s largest institutions. At present, Jackson pays UM a lump sum of $115 million annually. That pays for UM doctors treating uninsured patients, although UM collects from insurers for treating Jackson patients who have coverage. UM doctors also supervise Jackson clinical departments and oversee residents training at the public hospital.

Since 2007, when UM bought Cedars Medical Center, across the street from Jackson Memorial, Jackson leaders have been concerned about losing paying patients to the university facility.

With the proposed new agreement, “we would come to a very clear understanding,” said Marcos Lapciuc, chairman of Jackson’s board, “so that doctors don’t have a conflict of interest or divided loyalties. It will shift the control of the doctors to Jackson.”

Lapciuc said the change would also mean that “the exclusivity of UM” at Jackson Memorial “is going to start going way,” opening a path for Florida International University’s new medical faculty to provide services. At present, more than 90 percent of the doctors at Jackson Memorial are UM faculty.

Szaro said that under the new plan, some UM doctors would be compensated the same way FIU faculty members are at Jackson North, where the system pays their salaries and receives all income generated by their care.

Jackson Chief Executive Carlos Migoya said the change guarantees some UM doctors “will be 100 percent Jackson” and would “stop those conversations” about insured patients being sent to the University of Miami Hospital. UM would be paid for each specific service rendered by a faculty physician, rather than with a lump sum.

Don Steigman, Jackson’s chief operating officer, said the change would also help Jackson sign up managed care plans, which has sometimes been difficult in the past because the fees of the hospital doctors were not under Jackson’s control.

Donelan, the UM executive, said he was working with Jackson to start the new relationship on June 1, the beginning of UM’s fiscal year. In the past, UM officials have complained that Jackson executives tried to impose changes in the middle of UM’s year, when it was hard for the medical school to adjust its budget.

The new direction comes after months of negotiations without reaching a formal contract for the annual operating agreement for Jackson’s fiscal year that started Oct. 1.

For the previous fiscal year, which ended Sept. 30, Jackson had paid UM $130 million for all services the medical school provided. In August, Migoya said he needed to slash those payments by $52 million if Jackson were to break even. UM balked. Migoya offered a compromise—$16.5 million in reduced payments, plus $36 million in savings from more efficient UM doctor practices at Jackson Memorial.

UM voluntarily accepted the reduced payments starting Oct. 1, but the efficiencies have not yet been finalized. “We have literally 100 line items that we are working on collaboratively,” Szaro said. Last fall, UM’s Donelan said UM was happy to discuss efficiencies but couldn’t guarantee them, because “Jackson’s management really has to execute.”

Szaro said the efficiency meetings were continuing, but after at least nine drafts of an operating agreement for this year, he though it better to focus on creating a completely new concept for UM’s June 1 start date. Donelan said negotiators were “shooting for late March” to have a proposal ready.

In recent months, UM has been expanding its service locations, to compensate for reduced payments from Jackson and for its own financial needs. UM pediatricians, who used to work only at Jackson Memorial, now provide services at Broward General. UM obstetricians, who once were exclusively at Jackson, may soon be delivering babies at Mount Sinai.

Under a new relationship, Donelan said it was possible that some UM pediatricians and obstetricians would work exclusively at Jackson while others in those specialties worked exclusively elsewhere.

Jackson meanwhile would bring more community doctors and expand its relationship with FIU.

Fernando J. Valverde, chief executive of FIU Healthcare Network, the clinical enterprise wing of the medical school, said the university is negotiating to offer certain services at Jackson Memorial, a move that would give FIU “a foot in the door” in a hospital that had been exclusively UM’s. He said he expected an agreement signed within 90 days.

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