Jackson Health reports record profit, improved patient safety in 2015

Patients are getting fewer infections and suffering fewer injuries, though some snags remain, while the hiring of additional medical staff, technological upgrades and extensive renovations have begun to attract more insured patients to Jackson Health System, according to reports presented on Wednesday to the Public Health Trust that governs Miami-Dade's $1.8 billion-a-year public hospital network.

The combined improvements, Jackson Health administrators said, helped the public hospital system post an audited budget surplus of $64 million for the year that ended Sept. 30, 2015.

“That's the largest bottom line that Jackson has had in the published history that we can identify,” said Mark Knight, chief financial officer.

Jackson’s bottom line, however, still relies heavily on federal, state and local government support — a reality that will make the coming years a challenge. Federal funding for hospitals is scheduled to decrease this year at the same time that Jackson spends more to improve quality and satisfaction.

“It’s going to be a tough three years,” CEO Carlos Migoya told Jackson trustees.

Migoya emphasized the importance of sustaining the achievements of 2015, including improved outcomes in stroke care, reduced wait times in emergency rooms, and fewer pressure ulcers, falls and injuries among patients.

But maintaining those improvements requires sustained investments in the necessary people and resources, including medical supplies and prescription drugs.

The trick, Migoya said, is to manage those investments in additional people and resources while waiting for planned projects, such as a new 100-bed hospital and medical complex in Doral, to bear fruit in the form of patient revenues.

“Right now we're investing in the long term and we can't afford to cut costs,” he said. “We really need to figure out how to increase revenue. … We are in a tight environment right now, a very critical environment until some of these projects come out.”

Auditors reported that Jackson’s overall financial health improved in 2015 compared to the prior year, with more money in the bank, and increased volumes of patients and surgeries.

Patient revenues increased by about $81 million or 10 percent over the prior year, according to the audit, though changes in government accounting standards also led to higher pension plan liabilities for Jackson.

But the public hospital system — which includes six hospitals, two skilled nursing homes, a network of primary care clinics, and provides healthcare to inmates of Miami-Dade jails — cannot turn a profit on operations alone.

The system lost $335 million on operations in 2015, a loss that was offset by $467.9 million from non-operating revenues, including $242.1 million in local sales taxes, and $147.2 million in county funding and other contributions, according to the audit report.

Jackson Health also will face a significant reduction in federal funding for uninsured patients beginning in July, when a program known as the low income pool will be cut in half, costing Jackson at least $15 million and possibly more for the year ending June 2017.

Migoya named several areas where he will focus efforts, including sustained patient safety and satisfaction but also reducing the amount of time that patients spend in the hospital. By reducing a hospital-wide measurement called ‘length of stay’ by a single day, for instance, he said Jackson could save as much as $10 million a year.

In other business, Jackson trustees approved $9.3 million in contracts for six projects funded with $830 in general obligation bonds approved by Miami-Dade voters in November 2013.

The contracts will cover pre-construction costs for improvements at three campuses — including Jackson Memorial, Jackson North Medical Center and Jackson South Community Hospital — as well as the planned Jackson West project in Doral.

But they also mark the launch of a program designed to increase the number of women and minority owned businesses that compete for and win contracts for work at Jackson. Each of the large construction firms awarded a contract on Wednesday will be paired with a protégé small business from Miami-Dade.

Frank Regueyra, director of business development for Lunacon Construction Group, which is owned by a Hispanic woman, said the program will allow local firms like Lunacon to eventually compete for potential hospital building contracts.

Lunacon will be paired with The Robins and Morton Group, one of the largest builders in the nation, which will build diagnostic treatment and outpatient facilities, as well as the new hospital in Doral.

“Healthcare is one of those unique niches where if you don’t have the experience, it’s hard to get in,” Regueyra said.

Jackson trustees also approved a resolution authorizing payment of up to $2.5 million for the University of Miami Health System to cover the costs of higher patient volumes, medical supplies and medical care provided by UHealth physicians at Jackson South and Jackson North.

This story was originally published April 20, 2016 at 5:03 PM with the headline "Jackson Health reports record profit, improved patient safety in 2015."