Health Care

Nicklaus Children’s laid off 135 employees but plans to open a second hospital in Miami

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Nicklaus Children’s Hospital, the only stand-alone pediatric hospital in Miami-Dade and one of the county’s top private employers, has laid off 135 employees or more than 3 percent of its workforce.

The job cuts at Nicklaus come amid flagging patient admissions, reductions in insurer reimbursements and rising costs for drugs and other supplies — financial challenges reflected by workforce reductions at other hospitals in South Florida.

“This action was part of a series of measures to preserve the financial health of our organization and the vital services we provide to the children of our community,” Rachel Perry, a Nicklaus Children’s spokeswoman, said in a written statement to the Herald.

Asked for a description of jobs affected by the layoffs, Perry said the “top priority” for Nicklaus Children’s administrators was to “maintain nurse-to-patient ratios and quality of care. Those affected represent a cross section of the workforce, including management and administrative, technical and clinical support staff.”

She verified that at least one administrator was among those who are no longer employed at Nicklaus Children’s.

“While we do not comment on individual staff changes,” Perry said, “the hospital president and chief operating officer recently left the organization.”

Earlier this month, Nicklaus Children’s posted a statement to one of its social media accounts on Twitter announcing that the layoffs were complete, and refuting a rumor that the hospital was filing for bankruptcy. “Nothing could be further from the truth,” the statement read.

The layoffs follow an announcement that hospital administrators posted to an internal private network in March, informing employees that Nicklaus Children’s would eliminate pay raises, reduce pension contributions and limit new hires in response to financial pressures.

The Herald obtained a copy of the memo, which also stated that employee compensation and benefits make up about 57 percent of the hospital’s operating expenses, leading administrators to reduce the size of its workforce. Nicklaus Children’s employs about 3,500 workers.

One nurse who said he was laid off from Nicklaus Children’s posted his story on GoFundMe.com, a website for individuals to raise money for different causes. Abel Guerrero said on the website that he worked for the hospital for 20 years and won numerous awards, including emergency department nurse of the year.

Guerrero, who posted his story on April 4, said he was laid off with little notice.

“I walked in last night, met a new inexperienced manager in the hallway, he asked me to join him in the conference room, where a TM&E [Talent Management & Effectiveness] manager was awaiting,” Guerrero said in the post. “I was told my employment had been terminated due to the hospital financial crisis.”

Guerrero said he was provided with about 5 months pay and the opportunity to buy his own health insurance coverage at full price for a limited time. His post also criticized the hospital’s managers.

While Nicklaus Children’s shares many of the same financial pressures that other hospitals face, the hospital system also plans to open a new hospital near Miami International Airport, the former Miami Medical Center, which closed in October 2017.

The company that operated Miami Medical Center filed for Chapter 11 bankruptcy reorganization in Miami in March 2018, listing $21.4 million in assets and $67.3 million in liabilities.

One of the biggest investors in Miami Medical Center was Nicklaus Children’s, which served as a shareholder, lender and manager of the hospital through a venture called Miami Hospital Holdings.

Miami Hospital Holdings was partly owned by Children’s Health Ventures, a for-profit corporation whose officers were made up of Nicklaus Children’s board members and executives, including CEO Narendra Kini, former CFO Timothy Birkenstock and April Andrews-Singh, a senior vice president and general counsel.

Nicklaus Children’s administrators also instructed staff physicians, including pediatric cardiologists, and nurse practitioners to cover shifts at Miami Medical Center during the Miami Medical Center’s 20-month run.

Bankruptcy records show Miami Hospital Holdings provided $14.8 million in loans to Miami Medical Center, and services valued at about $1.56 million.

In June 2018, Nicklaus Children’s bought the Miami Medical Center out of bankruptcy and plans to re-open it as a hospital providing adult and pediatric care, including dentistry, dermatology, gastroenterology, general surgery, plastic surgery and other services.

Perry, the Nicklaus Children’s spokeswoman, said administrators are considering “various healthcare services” at Miami Medical Center, but that no final decision had been reached.

“The center remains closed during our review of opportunities,” Perry said in a written statement.

This story has been updated online to clarify the role of Nicklaus Children’s executives and board members in Children’s Health Ventures.

Daniel Chang covers health care for the Miami Herald, where he works to untangle the often irrational world of health insurance, hospitals and health policy for readers.
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