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Jackson Health System To Ask Labor For $200M In Cuts

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MIAMI (CBS4)-Jackson Health System executives announced Tuesday that they need reduce salaries and benefits for its 11,100 employees by more than $200 million to help the system get close to a balanced budget for fiscal 2012.

Chief Executive Carlos Migoya said he was looking for unions to accept cuts of 16-18 percent in total compensation but, as a trade off, he was planning no layoffs, according to CBS4 new partner The Miami Herald.

Martha Baker, president of the SEIU local that oversees most of Jackson’s healthcare professionals, called Migoya’s proposal “absolutely ridiculous.” She said that union workers had given up eight percent last year in reduced pay and postponed pay increases, meaning that Jackson’s nurses and others were now working “for 2007 wages.”

In other news at the monthly meeting of the Financial Recovery Board that oversees Miami-Dade’s public hospitals, Migoya announced the hiring of two top executives and the chief financial officer projected a much lower loss for fiscal 2011 than originally anticipated – but noted that hard times still lie ahead.

Jackson’s new chief strategic officer is Donn Szaro, an accountant who for years was the global director for Ernst & Young’s health sciences industry business. The new chief transformation officer is Fernando Salgado, a former IBM vice president and veteran consultant.

Migoya said the two hires were essentially bringing veteran consultants in house as employees rather than paying large sums for outside consultants. Jackson did not immediately respond to a Herald request for how much the system is paying Szaro and Salgado.

Migoya said he has also selected a new chief operating officer, who has lengthy experience as a hospital administrator, but can’t reveal who his pick is until that person notifies his employer and others. The COO will start June 20, Migoya said.

Meanwhile CFO Mark Knight told the board that he projected Jackson’s loss will be about $55 million for the fiscal year that ends Sept. 30. That’s a dramatic drop from his projection of $108 million that he made some weeks ago.

The change is due to several one-time only revenue gains that don’t make for a rosy future. Knight said that he predicts Jackson will have only 16 to 17 days of cash on hand by Oct. 1.

“That’s way too close for comfort,” Migoya said.

For more stories related to Jackson Health System, click here.

 

(©2011 CBS Local Media, a division of CBS Radio Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. CBS4 news partner The Miami Herald contributed material for this report)

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