Healthcare

Watchdog wanted for public funds to aid Jackson Health System

 

dchang@MiamiHerald.com

Now comes the hard part.

One day after Miami-Dade voters approved $830 million in public funds for upgrades and new equipment and facilities for Jackson Health System, local elected officials and leaders of the county’s public hospital network vowed Wednesday to keep a campaign promise that the money will be spent as intended and monitored closely by a yet-to-be-established oversight board.

But one county commissioner who voted against the referendum said he remains skeptical that the taxpayer funds will be shielded from undue political influence, or that the significant public investment will ensure Jackson’s long-term success amid a changing healthcare environment.

Commissioner Juan C. Zapata, who represents Southwest Miami-Dade, said he is convinced that politics will poison the process — even with an oversight board.

“How these monies get spent, where the bids get opened up, that’s now subject to politics,’’ he said. “If politics drives how we spend that money, you can rest assured that easily a big chunk of that money is not going to be spent in a wise way.’’

Commissioner Audrey Edmonson, who championed the bond issue from the moment it was publicly announced in late June, promised supporters on election night that politics won’t get in the way. She said an independent panel will be appointed to oversee how the bond funds are spent and to ensure they are used for Jackson.

She reiterated her pledge in a written statement Wednesday, but did not give a timetable or address the process for establishing the oversight board, including the panel’s membership or its scope of authority.

“The next step is to convene a citizen’s oversight board to keep a watchful eye on how the bond money is spent,’’ Edmonson said in the statement, “and I promise the people that this will be done.”

Carlos Migoya, chief executive of Jackson, echoed Edmonson’s comments during a press conference Wednesday and vowed “transparency” in the hospital system’s spending of the funds, which will be financed with general obligation bonds and repaid through a Miami-Dade property tax rate increase.

County officials have said they will likely issue the bonds in staggered amounts over a 10-year period beginning in 2014, and they’ve estimated the cost of repaying those bonds over a 30-year period at about $1.4 billion.

“The number one thing we need to do ... is make sure that we have the oversight board in place to make sure those funds are used exactly the way we promised the community it would be used,’’ Migoya said.

He estimated that an oversight board will be established within 90 to 150 days: “We will not spend one dollar of the bond until we have the oversight board in place.’’

Migoya said Edmonson has asked for his advice, and that he’s going to recommend individuals “with a diverse skill set” including accountants, attorneys, engineers and healthcare professionals “to make sure that not only we’re counting dollars ... but to make sure the funds are being used correctly for a public hospital.’’

He added that Jackson also is “working on a website, so everyone can see how the money is being used.’’

But not everyone is convinced that the public funds for Jackson will be used wisely.

Zapata said he’s concerned that an $830 million infusion into the county’s public hospital network, which includes the flagship Jackson Memorial Hospital and satellite hospitals in North Miami Beach and South Miami-Dade, will not resolve the system’s fundamental problems.

Personnel costs are one of those problems, he said, noting that employee unions wield considerable influence.

Jackson’s personnel costs consistently run over budget. For the 11 months ending Aug. 30 — the most recent period for which hospital system’s finances are available — administrators reported spending $746 million on salaries and related costs, compared to a budget of $708.5 million.

Zapata said he also was bothered by the lack of detailed planning for the future costs of operating Jackson. The hospital system’s wish list is extensive, including $70 million for a new rehabilitation hospital, $14 million for new elevators and $156.6 million for new computers and software to integrate electronic medical records.

With the upgrades and new facilities will come additional operating expenses for physicians and nurses and other staff, as well as utilities, maintenance and security costs.

Migoya has said his executive team has yet to calculate those expenses, but that he’s confident the hospital system would run at a profit “almost from Day One’’ because more insured patients will choose Jackson for their medical care.

But Zapata is not convinced that taxpayers won’t end up bearing the cost of expanding Jackson with a new pediatric outpatient center and a dozen new urgent care centers.

“Jackson is a subsidized system,’’ he said. “If you expand the system, you have to expand the subsidy. Where is that subsidy going to come from?’’

The cost to run Jackson is budgeted at $1.5 billion for the year ending Sept. 30, 2014. Because Jackson’s mission includes serving the uninsured, providing medical services to all Miami-Dade inmates and operating county nursing homes, the hospital system receives about $350 million a year in local taxpayer funds derived from a half-penny sales tax and property taxes.

Several Miami-Dade commissioners, including Zapata, have expressed confidence in Migoya’s managerial acumen, and credit the career banker with turning around the finances of a troubled public hospital system that in 2011 faced potential bankruptcy.

For the year ending Sept. 30, Migoya has forecast that Jackson will show a $40 million surplus — funds that are being reinvested into the hospital system with the remodeling of patient rooms and other upgrades.

He said Jackson will spend the most of the bond funds, about 80 percent, in the first three to five years on renovations and capital projects, including the construction of the rehabilitation hospital.

“That means the community will quickly see how this money is used,’’ he said. The remainder of the bond money will be spent after the fifth year on information technology and computer systems that are less visible.

Migoya said the first steps to using the bond funds will happen in “a few weeks” when the Public Health Trust that governs Jackson will award a contract to a firm that will create the master plan. Architects and a general contractor will be hired afterwards.

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