Jackson Health System

Jackson Health Trust votes to phase out unpopular healthcare contribution



A tentative labor deal with Jackson Health System employees lost some luster Monday when the board that runs Miami-Dade’s public hospital network agreed to phase out an unpopular pay concession but held off voting on performance bonuses for workers.

Following a heated discussion in which the board vice chairman accused his colleagues and staff of keeping him in the dark about the agreement, the Public Health Trust voted 5-1 to defer voting on the proposed bonuses for up to 30 days. But trustees unanimously approved the phase-out of employees’ pay contribution toward group health insurance.

Jackson Chief Executive Carlos Migoya refused to back down from his push for the bonuses, calling it “the right thing to do” for workers who have gone four years without a raise.

Under the agreement, which must be approved by Miami-Dade commissioners, Jackson would reduce employees’ pay contribution toward healthcare benefits, to 2 percent from 5 percent, retroactive to Jan. 1. The remaining 2 percent would go away at the end of the fiscal year on Sept. 30.

In addition, because the hospital system ended the last fiscal year with a better-than-expected $62 million surplus, Jackson administrators had proposed awarding one-time bonuses to employees amounting to 3 percent of their base pay.

Calling the deal secretive and irresponsible, trustee Joe Arriola came out swinging against it.

“This was not done openly,’’ said Arriola, a former Miami city manager. “I was never informed that there was going to be this adjustment.’’

Arriola told his colleagues on the six-member board: “We all agreed that we were going to let the county decide, and let it ride. But no, we have taken the lead and stepped on a lot of toes, coming out with a deal that the county has not approved.’’

Arriola directed his ire mostly at the bonus or so-called “gain sharing payment,’’ repeatedly asserting that he was never informed of it, although the other five trustees said they knew about the proposal months ago.

“I knew about the gain sharing going back nine months, when I first came on the board,’’ said Irene Lipof, a Miami Dade College teacher appointed to the board by Jackson’s labor unions.

The Jackson bonus was proposed publicly last week and quickly became a problem for Miami-Dade Mayor Carlos Gimenez, who has struggled to resolve an impasse with the county’s employee unions over the disputed healthcare contribution, which has been in place for four years and was scheduled to expire Jan. 1.

Jackson’s two unions, which represent about 10,000 employees, were among seven labor groups at impasse with the county, and their agreement was expected to be a model for others.

Gimenez said last week that he was taken by surprise about the bonuses. He said he had been considering a compromise that would phase out the 5 percent contribution that county workers have been required to pay toward their healthcare costs for the last four years.

County commissioners twice have voted to end the contributions right away; Gimenez has vetoed the measure both times, most recently last week.

The latest veto paved the way for Monday’s decision by the Public Health Trust to approve the tentative deal with Jackson’s physicians, nurses and other healthcare professionals.

Before the Jackson deal becomes official, however, Miami-Dade commissioners must let the mayor’s veto stand. They are scheduled to meet on Feb. 4.

If commissioners attempt to override the mayor’s veto and prevail, then Jackson employees — along with all Miami-Dade workers — will no longer pay the healthcare contribution, and the deal trustees approved Monday becomes moot.

Migoya and union leaders will meet over the next 30 days to discuss the bonus before coming back with another proposal for vetting by Jackson trustees.

In arguing against the bonuses but voting in favor of ending the pay concession, Arriola and a fellow trustee, Rep. Michael Bileca, a Miami Republican, said the so-called gain-sharing payment was too large, and that it amounted to a “double dip” for Jackson’s employees.

Bileca said he had expected any bonus would be in lieu of employees no longer paying the healthcare contribution.

Phasing out the first 3 percent of the healthcare contribution for employees is projected to cost Jackson about $10.8 million next year. The remaining 2 percent would be applied to the 2015 budget.

Giving Jackson employees the bonus, which would amount to an additional $17 million, seemed excessive, Bileca said.

“To me, it becomes double dipping,’’ he said.

Arriola argued that he doesn’t believe Jackson administrators can close the $10.8 million budget gap on the employee healthcare contribution through operating efficiencies, such as reducing length of stay for admitted patients, and cutting overtime for workers.

He accused colleagues and hospital staff of being poor stewards of the estimated $350 million a year the public hospital system receives in local tax funds, and added that he expects Jackson to lose money next year — making the bonuses a public relations nightmare.

“I cannot believe this is being presented to us,’’ he said. “I’m very upset about it.’’

But Migoya rejected Arriola’s accusations of backroom dealing, and defended the proposed bonus as an important tool for boosting employee morale.

“Never, ever have we made any side deals with any organizations, labor unions or anyone else,’’ he said.

He added that Jackson’s employees will go four years without a pay raise this September — a concession that the unions first acquiesced to during the financial crisis that threatened to bankrupt Jackson three years ago.

Under Migoya’s leadership, Jackson also eliminated 1,115 jobs — affecting 920 people and 195 vacant positions — in March 2012.

Martha Baker, president of SEIU 1991, said that by contributing to their health insurance, and by conceding pay raises, flex hours and other job benefits, Jackson employees have given an estimated $100 million a year to to the hospital system since 2010.

Those concessions, she said, helped transform Jackson after the hospital system lost more than $400 million from 2010 to 2012.

“Labor’s really done a lot of the turnaround,’’ she said.

Migoya said he had always promised Jackson’s employees that they would share in any budget surplus above $35 million for 2013.

The one-time bonuses, he said, were based on employee performance for 2013, and not a way of compensating the workers for their healthcare contribution.

Migoya said Jackson administrators already set aside the $17 million for bonuses — which is why they previously reported only a $45 million surplus — but that the Public Health Trust would ultimately decide how that money is spent.

“We still believe that gain sharing is the right thing to do,’’ he said.

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