Jackson Health System’s $2.3 billion budget for 2020 won approval from the Public Health Trust, with nearly a quarter of the spending plan buoyed by the annual subsidy from taxpayers, which is expected to total about $490 million.
That’s up about $14 million from the current fiscal year’s projection, thanks to continued consumer spending and an increase in property values, Mark Knight, the health system’s chief financial officer, told the Public Health Trust during a Tuesday evening meeting.
The sprawling health system, tasked with caring for Miami-Dade’s jail inmates and the bulk of its uninsured and under-insured patients, is also spending more funds from its $830 million bond issue, approved by county voters in late 2013.
In the 2018 fiscal year, Jackson Health spent about $105.5 million in bond contributions. In the current fiscal year, it had spent about $123.7 million as of June, and is projecting to spend $173.7 million by the end of September.
Though the Public Health Trust has approved the budget, it still must go through a public hearing process next month before final approval by the Miami-Dade County Commission.
Knight said next year’s budget is “break-even.” There are, however, challenges to Jackson Health’s finances including how long patients stay in the hospital.
“Length of stay,” Knight told the Public Health Trust on Tuesday, “continues to be a challenge at our flagship campus Jackson Memorial Hospital and there are many efforts underway... on reducing that length of stay and ultimately helping to reduce our cost.”
Length of stay, a term used to gauge how long a patient stays in the hospital on average, is considered an indicator of hospital efficiency, because the institution receives a flat rate for the treatments it provides for conditions such as chest pains. When a patient stays longer than expected, the hospital loses money.
In April 2016, Carlos Migoya, Jackson Health CEO, named length of stay as an area he would focus on, saying reductions could save the hospital as much as $10 million a year. In June of that year, length of stay averaged 6.97 days. In June of this year, it averaged 7.01.
In an interview with the Miami Herald, Knight said the length of stay challenge stems largely from the population Jackson Health treats. Patients with criminal records or those who require post-discharge care in a skilled nursing facility, he said, take longer to find a suitable place to release them to after they’ve received treatment.
“They often don’t have a family, so it’s difficult to place them,” Knight said.
Knight also said that Jackson Memorial Hospital is a training facility, and those types of institutions typically have longer lengths of stays.
“We’re trying to knock a day off the length of stay at Jackson Memorial,” Knight said, adding that such a reduction would account for $10 million in savings.
Competition for insured patients in South Florida has increased in recent years. And earlier this year, the state Legislature removed “certificate of need” requirements that make healthcare providers demonstrate why their services are needed in a given area before building a facility.
Public Health Trust Chairman Joe Arriola said he is unconcerned by increased competition from other healthcare providers because Jackson Health continues to grow its services aimed at insured patients, which he said will make the health system more capable of fulfilling its obligation to treat the needy.
“We have to work harder every day to earn every patient. That’s what I think the whole thing at Jackson has been for the last seven or eight years,” Arriola said. “For years and years and years, we relied on people just walking in.”
Part of that new direction, Arriola said, is increasing the number of specialists and upgrading facilities to attract new and better doctors, an effort that he said has been successful.
“We have to be very good on the other side, so we can pay for our calling in life, which is really to help the poor,” Arriola said.
Knight said Jackson Health is expecting a 2.5% increase in patient admissions for next year. He predicted the increase in patients will come from a rise in organ transplant surgeries and cardiovascular services, plus other services.
Jackson Health just hired an open-heart surgeon, Knight told the Herald, and a team of physicians at cardiovascular clinic came online in April 2019.
“We’ve seen some good success early on so that’s what is driving a lot of our surgical growth,” Knight said.
The health system is still struggling with overtime pay, but is trying to combat that by increasing the number of full-time employees on staff by about 180 to 12,687. That would help reduce overtime costs because there would be more employees to cover shifts.
The challenge, Knight said, is recruiting experienced registered nurses for specialized areas such as transplants and neonatal intensive care.
“I think our budget for 2020 is solid,” Knight said. “We’ve had a number of years now being in the black. We’re focused more on strategy and business development, and not so much crisis management.”