Does Jackson need $830 million in bonds to stay competitive?

08/28/2013 6:10 PM

08/29/2013 7:00 AM

The future of Miami-Dade’s public hospital system depends on voter approval of an $830 million general obligation bond for upgrades and expansion, according to Carlos Migoya, chief executive of Jackson Health System.

But Miami-Dade Commissioner Juan Zapata, who plans to vote against the Nov. 5 referendum, said he can envision a future for the system that expands it at a lower cost through a series of community partnerships and initiatives. At a Downtown Bay Forum lunch Wednesday, the former state legislator said he worries that the bond money would be shifted to pay for other needs — in the public hospital system or not — by meddling county commissioners who ultimately control the cash.

“I’m worried that once they get the money, guess who wants to spend it? The County Commission,’’ Zapata said. “We’re going to figure out ways to rob Peter to pay Paul. That’s what the county budget does.’’

Zapata, elected to represent the county’s western district nine months ago, cast the sole dissenting vote in July when the commission voted 10-1 to hold a special election in November asking voters to raise their property taxes to fund the 30-year bond to upgrade Jackson’s aging infrastructure, purchase new equipment and build new facilities.

Migoya said at the forum Wednesday that a separate governing authority would be established to ensure that bond money would be used as intended — for Jackson’s benefit.

“It will not be comingled with the bonds of the county,’’ Migoya said. “There will be complete separation of that, and there will not be an opportunity for the county to use those funds for something outside of Jackson.’’

Zapata said he also worries that a special election in November, when only four cities are scheduled to have elections, would result in low turnout not representative of the community.

“To hold elections when people are not engaged is not good for the democratic process,’’ he said.

An estimated 15 to 20 percent, or 180,00 to 240,000, of the county’s 1.2 million registered voters have historically turned out for special elections. The referendum also would cost the county about $2 million, according to the elections office.

Zapata said his other concerns include the uncertain future of the healthcare industry given the seismic reforms to come with the federal Affordable Care Act, and whether Jackson needs everything it’s asking for, such as a new rehabilitation hospital, a pediatric outpatient center and a dozen urgent care centers.

“Do we want to support Jackson to do something in uncertain times for a great deal of money?’’ Zapata asked the audience of about 100 people. “If the amount would have been maybe $250 million, I would have said that’s a worthwhile investment — $800 million scares me.’’

He said that instead of opening urgent care centers, Jackson could extend its reach by partnering with federally qualified health clinics and local hospitals. But he also conceded that such partnerships likely would be voted down by his colleagues on the commission, who have final approval over Jackson’s budget and many of its initiatives.

Zapata said Jackson should be governed by an independent board or restructured into a not-for-profit that would not answer to local politicians.

Migoya countered that Jackson currently receives about $350 million a year in funding from Miami-Dade through a half-penny sales tax and property taxes — funding that wouldn’t be allowed under a not-for-profit structure.

Migoya also noted that Jackson’s reimbursements from Medicare, the federal healthcare program for the elderly, and Medicaid, the federal-state healthcare program for the poor and disabled, are expected to decline dramatically due to Obamacare — another reason to improve Jackson so it can attract more patients. He estimated that Jackson could lose as much as $125 million a year due to federal healthcare reform.

And as the state moves the more than 3 million Floridians on Medicaid into HMO-style managed care run by private insurance companies, Migoya said, those insurers will negotiate lower reimbursements for hospitals and doctors in order to make a profit.

Migoya said Jackson’s operating rooms, patient rooms and other facilities are nearly 40 years old and many haven’t been refurbished since the 1970s.

He said Jackson must invest in upgrades — including a new rehabilitation hospital — to stay competitive and attract more insured patients. Jackson serves more uninsured and Medicaid patients than any other hospital in the region; serving those who cannot pay is an important part of its mission.

“For us to continue to build our business at Jackson,” Migoya said, “we have to be able to be attractive to paying patients. It’s what we call the ‘Doctor Robin Hood mentality’: We have to have insured patients to pay for those who cannot.’’

Zapata said he will not campaign against the bond, and he has confidence in Migoya and his staff, who in the past two years have reversed the hospital system’s dire financial position and this year expect Jackson to post a $35 million budget surplus.

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