The Miami Herald: “Jackson and UM try to reach basic agreement but fail – for now”

The Miami Herald

By John Dorschner

The board of Jackson Health System refused Wednesday to approve a “memorandum of understanding” with leaders of the University of Miami medical school — setting off verbal fireworks and creating huge uncertainties about what will happen Friday, when UM’s new fiscal year starts.“I don’t know what’s going to happen,” said Chief Executive Carlos Migoya at the end of a lengthy board meeting during which Chairman Marcos Lapciuc said UM had presented Jackson with an ultimatum he couldn’t accept.The memorandum, which Migoya had urged the board to accept, called for Jackson to pay the UM roughly $115 million, about the same value as the present contract. The nine-page agreement called for a base annual payment by Jackson to UM of $99.5 million, with monthly transition payments of $3.6 million for at least six months.

Lapciuc said UM should give Jackson’s board time to vet the details in the memorandum, adding: “If reason doesn’t prevail, the blood that will be spilled of our patients will not be on our hands.”

Migoya said he asked UM several times for an extension and was told no.

UM Vice President William Donelan and medical school spokeswoman Christine Morris, who both attended the meeting, refused to comment afterward. The board meets again Thursday and will reconsider the matter.

Board member Michael Bileca calculated that under a worse case scenario involving transition payments extending for year, the memo could end up costing Jackson $142 million over the next year. “That’s significantly higher than where we’re at now.”

Migoya said that his team hoped to iron out a new plan in coming months so that there would be no worst case. He said the memorandum’s main points would be binding for both sides, but details need to be hammered out by attorneys before an agreement can be finalized.

Since January, Jackson has been trying to craft a dramatically new operating agreement to change its half-century relationship with UM by “leasing” some UM doctors — paying for them and then getting the revenues the doctors earn seeing patients. At present, Jackson pays UM doctors to work at Jackson Memorial, and the university also gets any fees the doctors earn from insurers.

That concept is vaguely embraced within the memorandum, but many details need to be worked out. The memo envisions as many as 400 UM doctors working at Jackson, but when board members asked for the doctors’ names, they were told no list was available.

Under the memo, both parties agreed that the “centers of excellence” for organ transplants, women, children and trauma will remain at Jackson Memorial, staffed by UM doctors. UM has filed an application with the state to perform transplants at its own hospital, but said it would abandon that effort if a new operating agreement is reached, Migoya told the board.

Board member Joaquin del Cueto pointed out that several of these centers were money-losers or close to it, and he wondered how they would help Jackson’s finances.

Lapciuc said UM had threatened that if an agreement was not in place by June 1 it would need to adjust its budget and staffing accordingly, which he took as a threat that UM would start pulling doctors out of Jackson Memorial. At present, more than 90 percent of the hospital faculty are from UM.

“We are under the threat that has been imposed on us,” Lapciuc told the board. “We can’t be put up against the wall, ‘take it or leave it.’ We’re not going to buckle under pressure.”

Board member Joe Arriola complained that the vagueness of the memo left Jackson exactly where it was a year ago. Arriola, who last year resigned as a UM trustee to join the Jackson board, said he was fed up with the university.

“The University of Miami has shown that they are not willing to support Jackson the way we need support,” Arriola said. “The University of Miami is not interested in Jackson’s problems.”

Talking to Jackson’s executives, Arriola said, “I expect you guys to come forward in the next 12 months and make us totally independent of the university. They have said they don’t want to live with us. They have used us and they have spit us out.”

Board member Stephen Nuell urged the memo be accepted as a temporary measure. “We have a lot to jeopardize by not getting this done.”

Both entities have been experiencing severe financial troubles. The UM medical school recently laid off almost 1,000 fulltime and temporary employees and is cutting back on unfunded research. Jackson laid off 920 fulltime employees in April, trying to stem losses of $419 million the past three fiscal years.

Earlier this month, UM’s medical school dean, Pascal Goldschmidt, begged Jackson executives during a board meeting to announce how much they could afford to pay UM starting June 1 so UM could complete its budget plans. “We just cannot carry on without that information,” Goldschmidt told Jackson’s board.

At the end of the two-plus hour meeting Wednesday, Arriola, who often makes the most heated comments at meetings, urged his fellow board members to calm down overnight and reconsider the matter at their regular monthly meeting Thursday.

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