Jackson Health System board seeks $830-million bond referendum for hospital upgrades

06/25/2013 6:09 AM

06/25/2013 6:13 AM

The board that runs Jackson Health System on Monday voted to ask Miami-Dade commissioners to call a special election in November asking voters to approve an $830 million bond to pay for renovations and equipment upgrades at the taxpayer-owned hospital system.

The request from the Public Health Trust that runs Jackson came as something of a surprise, since it was not on the agenda prior to the meeting, but was added at the last minute by Darryl Sharpton, the board’s newly appointed chairman.

Though the resolution approved by the board did not mention a specific dollar amount, Sharpton said the hospital system needs a cash infusion of between $700 million and $1 billion to improve facilities, which include the main hospital in Miami’s civic center and satellite hospitals in North Miami Beach and South Miami-Dade. A spokesman for Jackson said the amount requested would be $830 million.

“We’re at a crossroads,’’ Sharpton said at Monday’s meeting of the seven-member board. “We have to do something drastically different or risk being irrelevant.’’

Miami-Dade Commissioner Audrey Edmonson, who chairs the county’s health and social services committee, said she supports the request and will sponsor the resolution at the next county commission meeting on July 3.

“It’s definitely needed,’’ Edmonson said Monday. “They have failing equipment ... leaking roofs. Equipment needs to be updated. The emergency room as well, there’s just so much that needs to be done at Jackson. It’s been neglected for years.’’

The hospital system is on the road to financial recovery after several years of fiscal crises that included about $419 million in losses over three years.

“Jackson is now profitable and is solvent for the first time in many years,’’ Sharpton said at Monday’s board meeting. “Financially we are better by almost any empirical measure.’’

But Sharpton said Jackson will need more financial support from its taxpayer owners in order to compete with other local hospital systems, and to ensure the long term sustainability of Miami-Dade’s safety-net hospital system for the poor and uninsured. He noted several areas where Jackson needs to improve to remain competitive.

“Some of our patients have to wait too long for some of our services,’’ he said. “Geographically, we’re not as strategically positioned as we should be.… We have learned system-wide that our facilities do not match those of other hospitals. We need to modernize our facilities and operating rooms.’’

Sharpton also noted that Jackson is challenged to keep the paying patients the hospital system already sees, and to increase revenues. In the past four years, in-patient admissions at Jackson have dropped 21 percent.

“To effectively meet our challenges,’’ he said, “this system needs a capital injection of anywhere from $700 million to $1 billion. This is a direct result of years of neglect that this institution has painfully endured.’’

Sharpton said Jackson, whose administrators declared financially solvent in May for the first time in five years, is capable of funding “a significant portion of this need, perhaps as much as 20 percent.’’

But, he added, “We will need our community to help fund the difference.’’

Jackson already receives significant public funding from local tax revenue — in property taxes and a half-penny sales tax — that amounted to $335 million last year.

The hospital system also receives millions in federal funding meant to offset the costs of treating many uninsured patients. But that money could be reduced under a proposal unveiled in May by federal health officials, who had anticipated that more uninsured Americans would have access to Medicaid as part of the Affordable Care Act.

But Florida legislators declined to expand Medicaid coverage in the state, and it is unclear how that will affect the volumes of uninsured patients at hospitals such as Jackson.

Asking county voters for additional public funding could be a challenge politically, but Edmonson said local voters should not be turned off by the referendum if the commission puts it on the ballot.

She said the issue is nothing like the Miami Dolphins’ failed effort to place a referendum before voters to help pay for $350 million in upgrades to Sun Life Stadium. State legislators nixed the proposal.

“I don’t think this is similar to the Dolphins at all,’’ Edmonson said. “This is a public service. The people own it. If anyone is going to fix it and make it better, it has to be the people. There’s no private industry in it.’’

Jackson officials likely will have to spend several million dollars to campaign countywide for approval of the bond referendum if Miami-Dade commissioners agree to call the election in November, when several municipal elections are scheduled to take place. Edmonson said she will ask Carlos Migoya, chief executive of Jackson, about his plans.

At Monday’s meeting, Migoya indicated that a campaign is already beginning to gel.

“There are support groups out there looking to provide the campaign necessary to make sure the public is aware of the needs at Jackson … and hopefully votes on its behalf,’’ he said.

In a written statement issued after the meeting, Migoya hinted at the potential sales pitch to voters.

“Jackson has proven over the last two years that we can deliver medical excellence along with sound business and financial performance,’’ Migoya said in the statement. “Now is the right time for our community to invest in its future, modernize the facilities and supercharge our growth for the next generation."

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