The chief executive of Nicklaus Children’s Health System resigned on Friday after 11 years of leadership that ushered in significant changes to Miami-Dade’s only standalone pediatric hospital, including a new name and benefactor, an ambitious expansion of new facilities from Jupiter to Homestead, and a financially troubled venture into private healthcare.
A pediatrician who spent much of his career in healthcare administration, Narendra Kini took the helm of Nicklaus Children’s in 2008 when the institution was a single facility known as Miami Children’s Hospital. He stepped down this week to “pursue opportunities in innovation,” said Mario Murgado, chair of the Nicklaus Children’s Health System board of directors.
“This is really, truly a moment where someone comes to a crossroads and says, ‘I’ve done everything here that I can. Let me see what else I can do and take advantage of those opportunities,’ ” Murgado said.
Matthew Love, Nicklaus Children’s senior vice president and chief financial officer who joined the hospital system in October, was named interim CEO.
Murgado said the board is not planning a search at present for a permanent CEO to lead the health system, which includes a 309-bed hospital, a network of nearly two dozen outpatient centers and clinics, and a private hospital that remains shuttered near Miami International Airport.
“We’ll see in six months,” he said. “Right now I want to give Matthew Love every opportunity.”
Kini, 54, was not immediately available for comment Friday afternoon. He earned a salary of $1.36 million plus about $250,000 in other compensation in 2017, according to Nicklaus Children’s publicly available tax filings.
His tenure saw an expansion of the hospital’s services, including the addition of a maternity ward, a pediatric trauma center and a 212,000-square-foot facility with new intensive care units.
The most high-profile change during Kini’s leadership was the second name change in the hospital’s history, which was founded as Variety Children’s Hospital in 1950 and became Nicklaus Children’s in February 2015 when the foundation created by Hall of Fame golfer Jack Nicklaus and his wife, Barbara, proposed a $60 million gift for the institution.
One of Miami-Dade’s largest private employers with nearly 4,500 workers, Nicklaus Children’s turned a profit of $26 million in 2017, according to Florida’s Agency for Health Care Administration, the state’s hospital regulator.
The hospital is profitable despite 62 percent of the patients having Medicaid, the state-federal program for the poor that pays far less than private insurance. But even with a modest surplus, Nicklaus Children’s ran into financial problems that led to 135 employee layoffs in March and questions about the hospital system’s ventures into private, for-profit healthcare.
The job cuts came amid flagging patient admissions, reductions in insurer reimbursements and rising costs for drugs and supplies — challenges reflected by workforce reductions at other South Florida hospitals.
Nicklaus Children’s is facing more than a tough financial environment, however. The hospital system also invested in a failed private hospital called Miami Medical Center, which closed in October 2017 and filed for bankruptcy in March 2018.
One of the biggest investors in Miami Medical Center was Nicklaus Children’s, which served as a shareholder, lender and manager of the 69-bed private hospital through a venture called Miami Hospital Holdings.
Miami Hospital Holdings is partly owned by Children’s Health Ventures, a for-profit corporation created in 2012 and whose officers are made up of Nicklaus Children’s board members and executives, including Kini, Murgado, Love (the interim CEO) and others.
In 2014, Nicklaus Children’s signed on to guarantee up to $70 million of financial obligations related to Miami Medical Center. When the private hospital defaulted on its debts, Nicklaus Children’s paid a total of $14 million in 2017 and 2018, according to an analysis by Fitch Ratings.
In December 2017, Nicklaus Children’s bought Miami Medical Center for about $88 million. In 2018, Nicklaus Children’s bought the Miami Medical Center’s equipment for an additional $30.5 million, all using internal Nicklaus Children’s funds, Fitch Ratings reported.
During 2018, Nicklaus Children’s also funded $7 million of Miami Medical Center’s operating costs as part of its obligations. Miami Medical Center’s bankruptcy was finalized in January 2019, and Nicklaus Children’s has no more debt obligations under its guarantee with the private hospital.
On Friday, Fitch Ratings released an assessment of Nicklaus Children’s outstanding bonds, which were used for building and expansion, including a $150 million bond payable through Nicklaus Children’s future revenues. Fitch assigned Nicklaus Children’s an A+ rating, and a stable outlook for the pediatric hospital.
Though Nicklaus Children’s had informed state regulators of plans to reopen the hospital for adult and pediatric care, Murgado said on Friday that “all options are open.”
He acknowledged that the venture “didn’t work,” and said Nicklaus Children’s officials would consider how the private hospital could help further the mission of the pediatric nonprofit health system.