Money Woes Threaten Future Of Jackson Memorial Hospital

MIAMI (CBS4) – Jackson Memorial Hospital is facing a “drastic situation” in which it will run out of money this summer and not be able to pay their employees without an immediate “influx” of cash, Miami Dade County commissioners were told Thursday during a meeting with the hospital’s governing board.

“We are in a drastic, drastic situation,” said Martin Zilber, a member of the Public Health Trust. “We can’t even continue to do what we are doing at the level we are doing it without significant cash influx.”

CBS4 I Team investigator Jim DeFede reports that fellow board member Mark Rogers offered an even more dire prognosis.

“I believe Jackson is non viable,” he said. “I want to repeat that again. I believe Jackson is non viable. As an economic entity it will not survive and you should be told that directly.”

But rather than trying to cut their way into solvency, Rogers said Jackson has to change the way it does business

“The answer to Jackson is not cutting costs,” he said. “The answer to Jackson is growing new business.”

In the short term, commissioners were told that they might have to advance Jackson anywhere from $30 million to $70 million in the next few months so that it can continue to meet its payroll. But even then, Jackson is facing an annual loss of $100 million this year.

While Jackson has made progress collecting money from patients – a problem that was at the heart of Jackson’s earlier financial crisis – the latest problems are myriad. The hospital is treating fewer patients than expected which will cost the hospital $76 million in lost revenue. The hospital is also expecting to lose $56 million in state funding.

Additionally, the hospital has nearly $1 billion in capital construction needs. For instance, the hospital must update its sprinkler and fire alarm system which could cost at least $10 million.

County Commissioner Sally Heyman said Jackson has not done enough to resolve its financial problems.

“It just seems to be to be crisis mode [jumping from] one crisis to another,” Heyman said, “and my concern is that we still haven’t gotten to the causes of the crisis.”

Jackson’s underlying problems are immense. As the county’s safety net hospital, Jackson provides $700 million each year in charity care for individuals who could not afford to receive treatment elsewhere. But the hospital only receives about $350 million from the half-penny sales tax and Miami Dade County to offset that care.

Jackson needs to find ways to close that gap. And given the political climate in the county, Jackson officials are afraid to ask Miami Dade residents for an increase in the half penny sales tax.

Commissioners Carlos Gimenez predicted the county would be able to give Jackson  the advance the $30 million to $70 million advance it needs, but he’s annoyed this is the second time in a year the county has had to bail Jackson out.

“It’s de ja vu all over again and part of the problem I had last year is I didn’t think they were being aggressive enough,” Gimenez said.

Jackson officials assured commissioners they were moving ahead with reforms, it just takes time. They also stressed that patient care was not affected.

While Jackson’s long term financial problems were not resolved Thursday, one issue that was settled was establishing a salary for the new president of Jackson. The selection committee set the salary at up to $975,000. The current president makes $665,000. With benefits and incentives the new president’s salary could top $1 million.

More from Jim DeFede
  • jean haller

    Put a bunch of politicians is charge of a GREAT hospital and look what happens.


    Look whats buried in the last paragraph.We are losing our balls but we can still raise the top guy salary to over a million….IS SOMETHING WRONG WITH THIS PICTURE!!!!!!!!!!!!

  • jean haller

    Please remember fokes JMH is owned and operated by MiamiDade County

  • bunnyblu

    Either give it back to the county or let UM take it. Actually UM should take control since they have had a hand in JMH’s demise. As I overheard one UM doc say “we want to put Jackson out of buisness”. And that’s all I have to say about that.

  • Eduardo Peña

    Jackson Memorial has a proven money making organization in place now, the Latin American and Carribean Ambassador program whose sole responsability is to solicit and direct medical referrals on a cash only basis from these countries directly to Jackson. However, it seems that City Commissioners are not aware of this program and this potential cash cow is being closed down. How du mb is that?

  • junio

    let close close jackson for one year restructure, modernize, downsize, and come back with a bang. whats bothering me about the failure bout jackson is money problem. yet still the county never addres the high salaries in dade county correction department. they have the most uneducated people with out rageous salary running the jails and nobody is talking bout that . it seems the jails is a separate entity form dade county. the jail is safer to work than emergency room at jackson. do u ever take a look at the people working in the jails officers. yes i scary and dangerous ha! u making me laugh. the officers go to sleeep more than the inmates the comissioners need to come and take a look at the jails and see the risk factors
    they should not get high risk pay nor be in the florida retirement give dem a 401 k without the high risk benefits and we cud take that money and give it to jackson. comissioners take note that will be your next budget problem

  • Silence

    What I find hard to understand is; How the members of the board can go about what must have been an exhausting and extensive process of selection of a new president for, and within the best interest of the health system, and eventually to get an outcome of Mr. Carlos Migoya.

    With the extensive business expertise that one would expect for a business man of this caliber, one would hope and and think. Now there is a turn around! This is a person is going to step in and roll up his sleeves and go after what can be an actual solution to the current problems that the system faces; Weather it be revenue, billing etc. because it is evident that the money flows through the institution.

    He simply turns around and not even within a month of taking ownership of his new position; takes the easy way out by simply starts laying people off, and also looks to find very imaginative and creative ways in order to cut the employees salaries; Frankly those are the type of unintelligent decision that can easily be made by a 12 year old and that should not be allowed at this level of business.

    It is an embarrassment! to the community of South Florida to have such a weak leader at place to lead a business that represent such a huge impact within our community.

    I strongly believe that these are the type of decisions that really don’t get us as a community anywhere but in everyones mouth by putting us down the scope and reassured that we handle things here in South Florida as a so called third world country.

    It is evident that changes are needed within the system, but we need a set of good and NEW and innovative ideas, because frankly all of that laying off along with the cutting of the salaries has already been done before within the system. As a matter of fact it has been done for close to three years now. And it goes to show that it simply does not work – it shows that it is not the proper approach. Otherwise we would be living those changes now.

    I really feel ashamed, and honestly takes away any kind of hope that one may have for this situation to clarify in its due time.

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