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Jackson Health System leaders warn of insolvency without county loan

 

jdorschner@MiamiHerald.com

Jackson Health System is close to insolvency and facing the specter of having one of its major vendors, Johnson & Johnson, shut off supplies unless the company receives a $1 million payment this week.

``Any day now, some surgeon might call me up, saying we don't have supplies, I can't operate,'' Chief Operating Officer David R. Small told Jackson's governing board, the Public Health Trust, on Tuesday.

With dwindling supplies and patients going to other hospitals, ``We are very close, if not already in, a healthcare death spiral,'' Small said.

Expecting to spend Tuesday debating a proposed cut of 4,500 jobs and the closing of two hospitals, Trust members heard a cascade of dire news from interim Chief Financial Officer Christopher Bayer and Treasurer Marcos Lapciuc that laid bare the financial difficulties faced by Miami-Dade's public health system.

Unless the county advances Jackson $67 million, Bayer said, the institution would be down to 1 ½ days cash on hand by April 5. That means the institution would need to stop paying its bills this month and through April. Jackson needs the money for three weeks, until it receives a state-federal payment of about $90 million at the end of the April.

``This is horrendous,'' Lapciuc said. ``This is basic, total insolvency.''

Alina Tejada Hudak, an assistant county manager, said the county would consider a temporary advance ``but we have our own cash issues.''

Small said the situation was steadily deteriorating, with patients avoiding Jackson because of negative publicity. He said the system is already not paying many bills. ``Our vendors are fleeing,'' Small said. ``We are at great risk.''

In the wake-like atmosphere, several board members said they were adamantly opposed to Chief Executive Eneida Roldan's suggestion that Jackson North and Jackson South be closed, but the board's only significant action during a 12-hour day started when board member Martin Zilber proposed that Roldan hire a short-term financial expert to help her executive staff resolve the dire financial problem and to carry out the sweeping recovery plan.

``It's just that -- it's help,'' said Zilber, a lawyer. ``There are people who specialize in short-term help. Maybe it's the Merrett Stierheims of the world.''

The Public Health Trust, which rarely has a dissenting vote, was deeply divided over hiring a consultant to serve as a chief financial officer.

``We've got two weeks to focus on a plan with so many questions,'' said trust board member Abraham Galbut. ``I don't need a [new] CFO.''

The board voted 9-6 to allow Roldan to hire a financial trouble-shooter.

Board members also were concerned they were being asked by Roldan to make drastic cuts by March 22 that could change the shape of healthcare in South Florida.

``There isn't enough time,'' Vice Chairman Angel Medina said.

Dorrin Rolle, a county commissioner and Trust board member, said he would vote against closing the two hospitals. ``I'd like someone to tell me where poor people are supposed to go.'' He said he wanted Roldan to come back with a new plan for finding $160 million in cuts without closing the two community hospitals.

Roldan said her plan was shaped on the assumption that Jackson would receive no rescue money from county, state or federal sources.

``It retains the core of what Jackson is,'' she said.

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