Despite three straight months of financial surpluses, Chairman Marcos Lapciuc said Thursday that the Jackson Health System remains technically insolvent and needs bold moves to turn itself around.
Speaking to the board in advance of a strategic planning retreat scheduled for next Friday, Lapciuc suggested one move could be asking for a bond issue of more than $200 million next year to provide money needed to improve the equipment and appearance of aging facilities.
Jackson’s bottom line has gained $8 million over the past three months, but Lapciuc noted that “our ratio is 62 cents in liquid assets for every dollar we owe. That basically in my opinion is insolvency.”
With the recent layoffs of more than 900 persons and other cost-cutting, “maybe we have stabilized the patient, but now we have to prepare ourself for the 12-hour ... complicated brain surgery,” Lapciuc said at the board’s monthly day of committee meetings.
The board has planned a daylong retreat at an airport-area hotel to map out a future for Jackson, which has lost $419 million the past three years and another $19.2 million for the first eight months of this fiscal year.
Lapciuc suggested the board prepare a three-year-plan and set priorities, including making sure Jackson stays No. 1 in trauma services, improving information technology, getting a true handle on which services are making money and hammering out a new agreement with the University of Miami medical school.
Though executives hope to gain funds for capital improvements through increased earnings, Lapciuc said “probably the most realistic idea” is to seek bond funds.
He said Jackson first needs to improve its performance to gain the confidence of the county’s political leaders and voters, but eventually it will need to seek additional capital funds. “We need to confront that reality. Otherwise, we’re living in a world of illusion.”
On Thursday, the board also heard more about the May financial report, which showed a surplus of $1.3 million with 10 days of cash on hand.
One big help was a bookkeeping change — a reduction in estimated bad debt, increase in charity care and insurer contractual allowances that helped the bottom line by $9 million. Chief Financial Officer Mark Knight said the adjustments were made because of better collections and more insured patients.
Another cause for recent improved performance — sales tax revenue is running $14.5 million higher than budgeted estimates for the first eight months of this fiscal year.
Knight told the board that the 10 days of cash is not as low as it seems because it’s based on a different measure than last year. The new measure does not include $83 million set aside for an “intergovernmental transfer” that was done on June 1, with that money being sent to Tallahassee in a complex bureaucratic move so that a larger sum could be “drawn down” from federal payments from the Lower Income Pool.