Yahoo Finance Miami’s public hospital has money problems. What that means for patients and workers
Miami-Dade County’s public hospital system is going through its toughest financial hurdles in over a decade, following a decrease in transplant and other surgeries and a slowdown in payments, according to Jackson Health CEO Carlos Migoya.
To cut expenses and regain its financial health, Jackson has frozen hiring for more than a dozen positions not related to direct patient care; laid off about 25 people in mostly managerial roles, including one hospital CEO; reduced benefits for senior leaders, and is looking to scale back overtime, Migoya told employees in March emails, which the Miami Herald obtained through a public record request.
“We are in the middle of our most difficult financial period since we began transforming Jackson Health System in 2011. ... This is not a crisis. Our hospitals and outpatient facilities remain busy with patients who trust our caregivers,” Migoya wrote in one email to staff.
None of the cutbacks will affect patient care, Migoya told the Miami Herald Tuesday in a Zoom interview. He said the internal reshuffling is to make sure Jackson remains “marginally profitable” as expenses continue to climb and revenue remains flat.
The decisions to cut back on costs come after a review of the hospital’s finances over the past several months. The taxpayer-funded hospital didn’t hit the mark in 13 of 30 indicators it uses to gauge its financial status, according to documents presented during a February meeting of the Public Health Trust, which oversees Jackson Health System.
Miami-Dade’s public hospital system serves as the county’s healthcare safety net, and provides care to everyone, regardless of their ability to pay and whether or not they have insurance. Jackson also serves as a leading academic and research center through a partnership with the University of Miami Miller School of Medicine. That combination, of care and research, means Jackson has more expenses then other hospitals, Migoya said.
“We’re a $3 billion a year organization, and $40 million adjustment,” which is how much Jackson expects to save from the changes it made, “is not a big adjustment,” Migoya told the Herald, noting that the cuts are under 2%. He also stressed that patients can be assured that their “public hospital is here to stay and is here to stay strong.”
“We were profitable in February. We were profitable in March,” and have been profitable for 13 years, Migoya said, describing the hospital’s recent financial situation as a “slight loss.” He expects Jackson will be back on budget by the end of the year.
What is causing Jackson’s financial stress?
Jackson executives told employees in March during a Zoom meeting that the first four months of its 2023-2024 fiscal year, which began Oct. 1, were some of the most financially difficult periods for the hospital in years. And it was more challenging then expected, according to Jackson leaders.
Migoya told staff that the hospital had begun preparing in September 2022 for 2024 as it began to understand “what was going on with inflation, what was going on with revenues” and the challenges that “not just Jackson, but the overall healthcare industry is seeing.”
Mark T. Knight, Jackson’s executive vice president and chief financial officer, expressed optimism during a recent Public Health Trust meeting that the hospital would be back on budget by end of year.
Hospitals across the country have braced for financial declines as COVID-related aid dried up following the end of the federal public health emergency last year. Jackson officials have also listed myriad reasons playing a role in the hospital’s financial change:
▪ Inflation. A record raise in wages for nurses, which executives acknowledge was necessary and has helped with retention.
▪ A reduction in surgeries and transplants. From January through February alone, the reduction in transplants at the hospital’s Miami Transplant Institute has cost Jackson about $13 million year-to-date, Knight said during a recent Public Health Trust meeting. Jackson hopes to see more transplants in the coming months. What should help: the hiring of new cardiac head Dr. Hari Mallidi to lead the Miami Transplant Institute’s reopened adult heart transplant program. The program was shuttered in 2023 for several months while it was investigated by the nonprofit that oversees the U.S. organ transplant network for complaints regarding patient deaths and infections. So far, Jackson has performed at least two adult heart transplants this year since Mallidi began his new role in mid-November.
READ MORE: He died after getting a heart transplant at Jackson. His loved ones want answers
▪ Also affecting Jackson’s bottom line: a slowdown in payments, particularly with “payer mix” deteriorating at two of its largest locations, Jackson Memorial Hospital and Jackson North. “Payer mix” measures how many patients have federal health insurance, such as Medicaid and Medicare, compared to patients who pay out-of-pocket or have private medical insurance. Knight, Jackson’s chief financial officer, said in the staff meeting that his team was “working aggressively” to reduce denials for services from insurers to ensure that the hospital gets paid for services provided to patients. The hospital is also reviewing its purchases and reducing how many vendors it buys supplies from to get higher discounts, similar to how people buy items in bulk at Costco. About 13% of Jackson Health’s patients don’t pay and about 30% of its patients are enrolled in Medicaid, a health insurance program run jointly by the federal government with the states, Migoya said. He said Jackson doesn’t make much money caring for these patients, but providing care to those who are underinsured or uninsured is integral to Jackson’s mission to ensure everyone can have access to care. And insurance payers, he said, don’t want to pay more for the services Jackson offers; they want to pay less.
▪ And the unexpected national cyberattack of Change Healthcare, owned by United Healthcare, which is the largest insurance payer at Jackson. The nationwide Change Healthcare cyberattack temporarily affected the payment process system that some hospitals, providers and pharmacies in the country use to process medical claims for payments. At the time of the cyberattack, Jackson estimated it could see up to $30 million a month in missing revenue due to the breach, which would make up 20% to 25% of how much patient revenue it usually collects, according to Miami Herald news partner WLRN. Migoya on Tuesday said the breach did not impact Jackson as much as other hospitals, and while it did cause a slowdown in payments, Jackson saw a “big pickup in March” and is “starting to catch up.”
What cuts did Miami’s Jackson Health make?
As part of the internal shakeup to cutback on costs, Jackson:
▪ Paused hiring for about 40 of its more than 500 open job positions, Michelle KIigman, senior vice president of human resources administration, told the Miami Herald in early April. The deferred positions will not “have any impact to patient care,” and were mostly related to “leadership and corporate support areas,” she said. The HR executive said the hospital is still hiring for clinical and “patient-facing areas.”
▪ Laid off about 25 people from its 15,000-member staff. The people who lost their jobs worked mostly in managerial roles and were not involved with direct patient care, and at least seven were later reassigned to work another role at Jackson, Kligman said. People affected by the layoffs included directors, managers, analysts, coordinators and Jackson South CEO Ben Rodriguez. As part of the reshuffling, senior vice president and Jackson West CEO Edward Borrego will now also oversee Jackson South Medical Center.
▪ Slashed the vehicle allowance that was part of the compensation programs for about 30 hospital leaders, who hold the job title of vice presidents or another high-ranking position. Previously, the hospital would reimburse senior leaders for the cost of traveling between facilities.
▪ Pushing efforts to streamline the documentation process at its facilities. That means the hospital is trying to improve how its doctors and nurses report and record information daily, including treatment updates, related to patient care. Executives say this will not only make patient care more efficient, and decrease the length of hospital stays, but also help Jackson save money. The estimate: about $30 million in “incremental revenue,” according to Migoya and Knight, Jackson’s chief financial officer.
KIigman says the compensation program changes alone is expected to save Jackson about a million.
“In the future for healthcare, the only thing consistent will be change” and everyone will have to continue to adapt, Migoya said in the March meeting with staff.
“We still have to take risks to ensure we continue to grow for the better of the community,” he added.
The future of Jackson
Migoya believes the reshuffling the hospital system is making will help keep it on track to reach its goals for J35 – Jackson Reimagined, which is like the hospital’s road map to 2035.
When asked about donations, Migoya explained that any money raised for the hospital, including the recent One Day for Jackson fundraising campaign, doesn’t go to the hospital’s operating expenses. He said donations help fund investments in new technology and other projects, such as its $300 million plans to renovate and expand its ER into one of the largest in the nation.
He also doesn’t foresee the county requiring any new taxes to help the hospital with operating costs. The last time a tax was implemented to help Jackson with operating expenses was in 1992, with the half-penny tax, he said, noting that the November 2013 property tax referendum Miami-Dade voters approved was to help fund renovations, equipment upgrades and new construction.
“What healthcare is going through today is going to continue,” but Jackson is looking to the future, he said. “No one is going to be paying more for their day-to-day care.”
He reiterated a similar sentiment during a staff meeting: Jackson is the county’s “lifeline.”
“We want to make sure that not only we have a sustainable Jackson for the future, and a healthy Jackson for the future,” he said, ”but a Jackson that will continue to lead the health of our community.”
