The Miami Herald: “Jackson Health System is improving but major challenges remain ahead”

The Miami Herald

By John Dorschner

Carlos Migoya concluded his first year as leader of Jackson Health System with two months of financial surpluses, but major challenges lie ahead in his attempt to turn around the troubled public hospitals.The most pressing short-term issue is that the system is projected to be below 10 days of cash on hand for June, July and August, according to estimates that Chief Financial Officer Mark Knight gave Jackson’s governing board Thursday.

Jackson is planning to maintain this precarious position by continuing its policy of being slow to pay vendors . At the end of April, accounts payable had reached $165 million, and Knight said some suppliers are insisting on cash-on-delivery to continue selling to Jackson.

Migoya said he hopes to reduce accounts payable by about $30 million starting in May — when the bottom line begins to feel the effects of laying off 920 employees.

Migoya, who took over as chief executive on May 1, 2011, reported a surplus of $843,000 in April and $6.2 million in March — a major achievement for a system that lost $419 million the past three years. Migoya said Thursday there’s a chance that Jackson can break even for this fiscal year, which ends Sept. 30, although the official projection is still for a $12 million loss.

On Thursday, Michael Bileca, a board member and state representative, praised Migoya and his team for making today’s system “a far cry” better than it was a year ago: “It took a lot of work to make that happen.”

Virtually all the improvement so far has been through cost-cutting, and some of the toughest work on that is continuing during negotiations with the University of Miami for a new type of operating agreement. Many UM doctors work at Jackson. Migoya said Thursday he is “cautiously optimistic” about the talks and may have news to announce next week.

“It’s a new UM in the last couple of weeks,” board Chairman Marcos Lapciuc said, referring to the medical school’s recent moves include laying off almost 1,000 full-time and temporary workers. Since then, “we’re getting a lot closer” to settling issues, Lapciuc said.

Beyond that, the harder job appears to be developing a strategic plan for new ways to bring in paying customers. The board is planning a day-long retreat on June 22 to discuss strategy.

Jackson also welcomed one staffer and said goodbye to another. Incoming: Thomas Schramm, a veteran South Florida fund-raiser, who is the new head of the Jackson Memorial Foundation. He spent 15 years with Baptist Health South Florida and most recently was director of development for the Florida Grand Opera.

Outgoing: Fernando Salgado, the chief transformation officer, who resigned. Salgado, a onetime executive with IBM and General Electric, was hired by Migoya a year ago for $450,000 at the same time Donn Szaro, a long-time acquaintance of Salgado’s, came on board as chief strategy officer. Szaro died March 31.

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