Posted on Sat, Feb. 18, 2012
Things are changing at Jackson Memorial Hospital, even if not fast enough to suit everyone.Some board members are skeptical that CEO Carlos Migoya can pull this trick off — cutting costs and increasing revenues without damaging the quality of the vital healthcare services the public hospital provides to this community. But Mr. Migoya has a plan, he makes a reasonable case that it can produce results, and he deserves a chance to prove it.
A former banker with a strong record in the private sector, Mr. Migoya arrived at his post less than a year ago. He found a hospital that despite his predecessor’s best efforts was bleeding red ink, stuck with a business model desperately in need of an update — to say the least — and obliged to work in partnership with the University of Miami that effectively yoked the hospital to a competitor.
The challenge remains formidable, but the need to fix the hospital’s finances is undeniable. It has lost $423 million in the past three years, an unacceptable amount, particularly when there are so many demands on the public purse strings. With a new management team in place, Mr. Migoya told The Miami Herald’s editorial board, he has started to implement the sort of “cultural change” necessary to put Jackson on a path to financial recovery.
A new performance model, for example, requires managers to know how much money they’re spending and be able to justify it. That’s common practice in most businesses, but a whole new world in the public realm. Other plans include reductions in patients’ length of stay — a savings Mr. Migoya says is being accomplished without hurting patient care.
An alteration in the relationship between Jackson and doctors at UM may be the most significant change so far.
UM doctors are 97 percent of the physician workforce at Jackson, but because UM owns another hospital, the two are in competition for patients with private insurance. Under a new working agreement — a letter of understanding is expected this week — Jackson’s leaders hope to attract more community doctors, reducing UM’s participation to 50 percent and leading to more revenue for Jackson. The trick is to make this a win-win arrangement for both sides. And for patients.
Ordering fewer (unnecessary) tests for patients, particularly those on Medicare or Medicaid. Procurement reform (a claimed savings of $30 million). Reductions in “unmanaged overtime,” and a significant reduction (from 90 days to 50-55 days) in outstanding receipts. All these are part of the plan that Mr. Migoya is laying out in a sort of progress report to the community.
There has also been demonstrable progress in union contracts, due to be scrutinized this week by the County Commission. The new deal maintains base salaries but calls for a 3 percent cut to fund pensions, shaved benefits, and loss of leave days and merit or cost-of-living increases for the next three years.
Jackson board members Stephen S. Nuell and Michael Bileca, both accountants, weren’t persuaded over the size of the projected savings. The contract was approved by a vote of 4-2. Nevertheless, this is a turn in the right direction. The board’s skeptics should keep at it, however. The level of scrutiny they’re now providing was scandalously lacking before.
The changes at Jackson are a work in progress. Mr. Migoya and his team are not miracle workers. But after years of grim news, the prognosis for Jackson offers reasons for encouragement.