How does an entity employing 12,000 people-- one of the most important employers in the region-- get its budget deficit so wrong: apparently four times greater than it had anticipated? It is losing $14 million per week. Heads should roll: but whose? I suggest taxing the Florida Marlins.
Posted on Wed, Feb. 03, 2010
No easy fix for troubled Jackson Health System
BY JOHN DORSCHNER
jdorschner@MiamiHerald.com
Miami-Dade's healthcare leaders agreed Wednesday that the county dare not let the beleaguered Jackson Health System fail, but no one yet has a clear idea of how to keep it going.
``This is the safety institution for all of South Florida,'' said Brian Keeley, chief executive of Baptist Health. ``Everybody counts on it. I can't imagine the County Commission letting it fail.''
``I believe the community will figure out a way to make this work,'' said John H. Copeland III, chairman of the Public Health Trust, which governs Jackson. ``But there are communities that have shut down safety net hospitals. It's hard to imagine that happening with Jackson, but it's within the realm of possibility.''
These comments came a day after Jackson executives released revised figures, forecasting that the public system will lose $229 million this fiscal year. It is losing $14 million a month. As of Nov. 30, it had $99.2 million cash. That works out to 22 days of cash on hand to pay bills. At the rate it's losing money, Jackson will be flat broke by the end of June.
In fact, serious troubles will happen well before that. The system needs about 16 days of cash -- about $70 million -- just to meet biweekly payroll for its 12,000 employees.
Jackson Vice President Christopher Bayer said that the county has agreed to advance Jackson cash to meet payroll, if necessary.
``That's a big commitment,'' said Keeley at Baptist, because payroll is more than half the costs at virtually all hospitals.
But it doesn't solve Jackson's persistent problems, shared by many public hospitals across the country -- serving growing numbers of uninsured while seeing its tax revenue shrink.
``We need help,'' said board member Martin Zilber. ``I don't think that the county can do that much,'' since it's fighting its own budget woes. ``We need federal help. We need state help. Somebody needs to step up to the plate and pay us.''
The Public Health Trust has voted to seek the start of a special hospital taxing district to have access to increased funding, but Mayor Carlos Alvarez and county commissioners have yet to show any enthusiasm for the idea. Even if they did, the initiative couldn't get on the ballot until November. If approved by voters -- a big if -- it would not be until 2011 at the earliest that funds would start flowing.
On Wednesday, Commissioner Rebeca Sosa released a letter to the mayor asking detailed questions about how the county will respond to Jackson's crisis:
``What is our legal responsibility to them? What would happen if the PHT or the hospital were to declare a financial emergency or become insolvent? It is of paramount importance for us to know specifically what is the mayor's and the county administrator's plan and authority to address critical cash flow shortages. . . . We cannot allow time to pass by and see our only public hospital fall apart piece-by-piece.''
County Communications Director Victoria Mallette said neither the mayor or county manager were available. In an e-mail, she wrote: ``Jackson is a critical part of our community's safety net and public health infrastructure. The county is providing $160 million in support to Jackson in the current fiscal year. We will continue to work with Jackson's CEO and Board on strategies for moving forward.''
Copeland said he was confident county commissioners will help maintain Jackson though none have stepped forward till now. ``I think the problem just now is becoming into crystal clear focus, and solutions will be forthcoming.''
Elsewhere, hospitals treating the poor and uninsured have closed. The Martin Luther King Jr.-Charles R. Drew Medical Center in Los Angeles was the most spectacular example, closing in 2007 beset by massive financial losses and accusations of poor quality care. Last week, St. Vincent's in New York City shut down its inpatient services and the governor advanced $6 million so it could meet payroll.
In Atlanta, Grady Memorial was near collapse in 2007, rescued only by a new infusion of government cash. It made national headlines last year as it paid for immigrants to go back to their native countries rather than fund their dialysis treatments. Jackson also is stopping payments for outpatient dialysis.
On Wednesday, Chief Executive Eneida Roldan said, ``We need to start doing things differently. . . . We need to do more with less. We need to be leaner as an institution. We need to tell our constituents that Jackson can't be the all-in-all. We know there are going to be cuts in services.''
Public Health Trust member Zilber said that for some years Jackson had warned that the the system's finances were going down hill, but it was only now, ``in an emergency situation,'' that political leaders were beginning to take note. `If we have to deny service to hundreds and thousands of citizens, they won't be able to ignore it.''
Vice President Bayer said restating financials was not a matter of failing to collect money from insurers and patients, but ``was more of a timing issue.''
Having to see more uninsured patients meant the hospital collected $25.90 of every $100 billed in fiscal 2009, rather than the $29.60 of every $100 it collected in 2008.
``We should have been booking this throughout the year,'' said Bayer of the change, but instead it waited until Tuesday to announce that the loss for 2009 was $203.8 million, rather than the earlier reported $46.8 million.
Because of discounts to insurers and uninsured patients, all hospitals collect a fraction of what's billed. Paul Goldberg, a veteran hospital consultant, said facilities generally collect 10 percent to 30 percent of gross charges, depending on how much they inflate gross charges, the percentage of uninsured and how well they're able to bargain with insurers.
``There are no reliable industry benchmarks in this particular area,'' Goldberg said. The key is for administrators to keep close watch on how much money is really coming in.
Linda Quick, president of the South Florida Hospital and Healthcare Association, said some Jackson services were invaluable to the entire region, such as its trauma center, its spinal chord injuries program and its burn unit -- all of which attract patients from many areas beyond Miami-Dade.
``And then there's its importance as the teaching hospital for the University of Miami,'' Quick said. ``These things are important to the whole community.''
4 comments:
This is what happens when we tax ourselves to do good. We get whacked.
Why do county, city, and state officials wait until the last minute to react? Can't these people think ahead if alarm bells are going off?
This is what happens when when the Public Health Trust hires a jackass to run its Flagship business Jackson Health Systems.
Unfortunately, I have seen this very same scenario playout at many other public health systems and it's never pretty. Change is often reactive to a crisis when it should be proactive to industry changes, declining remibursement methodologies, and increasing costs. If their is to be any organizational transformation for the better it will require cost reductions, lots of process improvement, and most importantly, disconnecting the politicians from any public health system authoritative figure so that sound business decisions can be made. Often times, the politicians, unions, and their constituents complicate and disallow progress alligned with best practice industry standards.
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