Health Care

On brink of disaster, Jackson turns profitable thanks to visionary CEO

Changing the public perception of Jackson Health System

Jackson president and CEO Carlos Migoya discusses the slow process of modernizing the health system and changing the public perception of it.
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Jackson president and CEO Carlos Migoya discusses the slow process of modernizing the health system and changing the public perception of it.

No prior healthcare experience required. Track record of turning around troubled institutions preferred. The job description for rescuing Miami-Dade’s century-old public hospital network, Jackson Health System, from the brink of financial ruin five years ago did not call for a seasoned healthcare executive.

Instead, as sometimes happens in a crisis, the job fell to an unorthodox candidate: Carlos Migoya, a retired banker and erstwhile auto dealer who frankly didn’t need the salary or the headache of turning around a $1.7 billion-a-year public enterprise in an industry he hardly knew.

But Migoya had done this sort of thing before, working for a dollar a year as Miami city manager in 2010 when bloated union contracts threatened to drown the municipal ledgers in red ink. And after 35 years running some of the nation’s biggest banks, a career that made him a wealthy man, Migoya was looking to leave a legacy for the city that welcomed him as a child and Cuban immigrant in 1961.

“If I could turn around Jackson Memorial, it would be the biggest legacy I could leave for the city,” Migoya, who turns 66 this month, remembers thinking about the job.

Carlos Migoya, a retired banker and former Miami city manager, discusses his legacy and success in saving Jackson Health System

Stocky and bald, with the optimistic demeanor of a man who’s accustomed to overcoming the odds, Migoya said he took the job against the advice of “some of my very good friends” who told him there was no way to succeed.

“I said, ‘Look, if I fail, at least I tried,’ ” he said. “But we need to give it a shot.”

Five years after taking over one of the nation’s largest public hospital systems, Migoya, the one-time healthcare neophyte, appears well on his way to leaving an indelible mark on one of Miami-Dade’s most storied institutions.

He has set Jackson on a path to financial stability, forged a stronger bond with its labor unions, reinvigorated its affiliation with the University of Miami Health System (UHealth), which provides more than 90 percent of the doctors at Jackson, and sold the public — and county voters — on a future vision for the public hospital network financed largely with $830 million in taxpayer support.

Jackson has more money in the bank now than it did when Migoya took over, even though the hospital spends more to deliver care than it receives in patient revenues. Tax money from the county more than makes up the difference.

More patients with health insurance are choosing Jackson for surgeries and other care. Infections and injuries are dropping, and this month an outside auditor verified the fourth consecutive year of budget surpluses — $62 million for 2015, the largest in the hospital system’s history.

To be sure, Migoya also has had the wind at his back.

The Affordable Care Act has led to an increase in the number of people with health insurance in South Florida, reducing Jackson’s financial burden for indigent care. And the recovering economy has led to a marked increase in Miami-Dade sales taxes and other county support for Jackson.

But despite the healthy reserves built up last year, a minefield of challenges lies ahead. Most urgent for Jackson, federal funds for hospitals to care for the uninsured will diminish once again beginning in July at the same time that public health indicators show a rise in chronic disease deaths and other healthcare needs for the county.

The overwhelming consensus among those who oversee and work at Jackson, however, is that Migoya has been the right man for the job.

“He’s guided it through difficult times, and has done a tremendous job,” said Miami-Dade Mayor Carlos Gimenez, who along with the county commission controls the make-up of Jackson’s board and ratifies the hospital system’s budget.

“No question, Mr. Migoya has had a huge impact on how Jackson is run and how it’s perceived by the community at large,” noted Eduardo Bancalari, a UHealth neonatologist and chief of newborn service at Jackson Memorial.

“He’s transformed this place,” said Martha Baker, a registered nurse and president of the labor union representing 5,000 Jackson doctors, nurses and other professionals. “He’s not just doing a job. From what he says and watching his feet, he’s really interested in making Jackson more sustainable for the future.”

When Migoya started at Jackson on May 1, 2011, the hospital system was running out of cash after losing $419 million over three years, mostly from budget overruns and a major write-down of uncollected debts.

Healthcare experts and local elected officials proposed that Miami-Dade either sell the taxpayer-owned hospital system to a private operator or significantly scale back its mission of caring for all county residents, regardless of their ability to pay.

He’s guided it through difficult times, and has done a tremendous job.

Miami-Dade Mayor Carlos Gimenez

But Migoya pushed back on those proposals. He drew up a plan to rein in costs — in large part by negotiating more than $50 million a year in salary and benefit concessions from labor unions — to establish best practices from the executive offices to the operating rooms, and to transform Jackson’s image from a provider of last resort to a hospital of choice.

Joe Arriola, chairman of the Public Health Trust that governs Jackson, said one of the traits that impressed him most about Migoya was his management style.

“Instead of being a guy walking in and trying to be ‘The Guy,’” Arriola said of Migoya, “he put a great staff around him, worked with the staff, let the staff do what they do and Carlos did what he does — he’s more involved in the finance, and vision, and a little bit on the political side.”

Migoya wasted no time once Jackson’s board chose him for the job. Before agreeing to his contract for $595,000 a year in base pay, which has since grown, he jetted to Tallahassee seeking state money for the hospital system.

Then he replaced the management team, interviewing candidates and empowering them to establish best practices and processes for measuring productivity and reviewing profits and losses department-by-department.

That was the easy part, Migoya said. “Running a business is running a business,” he said. “The need to make sure that everybody is accountable and creating that environment is the same.”

More difficult decisions came less than one year into his tenure, when Migoya proposed steep concessions from labor, including furloughs and cuts in pay and benefits, and a reduction of nearly $52 million in Jackson’s annual agreement with UM, in part by outsourcing emergency room doctors.

“As you can imagine, that was not exactly comfortable,” said Pascal Goldschmidt, dean of the UM Miller School of Medicine, who at the time was also chief executive of the university’s burgeoning health system.

Soon after, Migoya proposed that Jackson cut nearly 1,200 full-time jobs — about 11 percent of the work force at the time — and hire part-timers to fill the gaps.

The moves had political support, but they were strongly opposed by labor leaders, who accused Migoya and his executive team of trying to privatize Jackson after years of taxpayer support.

In hindsight, said Baker, the labor union president, “He was really just establishing himself as the new sheriff in town.”

But amid their fight, Baker said, she witnessed a “transformation” in Migoya that convinced her he had the hospital system’s best interests at heart: He stood up to the mayor.

“Gimenez was saying maybe Jackson doesn’t need to do everything, and Migoya was defending Jackson,” Baker said. “He was actually challenging elected officials on their stance that maybe we need to downsize Jackson.”

Baker’s hunch proved right, she said, because two years after winning labor concessions and imposing layoffs, Migoya would defy Miami-Dade’s mayor and members of Jackson’s board by agreeing to restore pay and awarding a one-time bonus for hospital employees.

The move angered Arriola and it undercut Gimenez, who had reached an impasse in his own negotiations with the county’s other labor unions. They, too, were seeking relief for their contract concessions.

“This is BS,” Arriola wrote in a memo that he fired off to Migoya an hour after the deal had been announced, though he has since conceded that the CEO was right. “We have a really nice partnership with labor now,” he said.

Looking back, Gimenez said, “It was going to put out of balance what we were trying to do in treating all the unions the same.” But he considers it “only a disagreement,” and said it did not diminish his respect for Migoya as a professional and personal friend.

Patching up Jackson’s fractured relationship with UM required a different set of skills.

From the outset, Migoya had said he wanted to find efficiencies in Jackson’s annual contract with the university, which was valued at about $130 million at the time, and paid UHealth for its physicians treating uninsured Jackson patients, faculty supervising training of the residents, heading Jackson clinical departments and other services.

Weeks of tense negotiations led to a new agreement that would reduce Jackson’s payment to UM to about $113.5 million, with a pledge to find an additional $36 million in savings. But hard feelings remained, and two months after the deal was announced the decades-long relationship hit the skids.

Jackson and UM, collaborators since 1952, had become increasingly competitive after the university bought the 560-bed former Cedars Medical Center, directly across the street from Jackson Memorial, in 2007.

A member of Jackson’s board openly accused UM physicians of taking insured patients away from Jackson and sending them across the street to its own hospital, and he said the university was consolidating profitable service lines, such as urology and orthopedics, at its hospital.

“A lot of people at the time, on the board and elsewhere, thought UM was bad,” said Goldschmidt, who rejected the accusations that the university’s physicians were stealing patients and business from Jackson.

But he credited Migoya as being “instrumental to changing the chemistry between the two organizations,” adding: “He realized that our doctors were bringing private patients, that they were working hard, that they were bringing a lot of revenues to the Jackson Health System.”

It didn’t hurt that UM also lent considerable political support to Jackson’s campaign to win voter approval for $830 million in debt bonds to finance remodeling and rebuilding of its facilities to attract more patients.

$62 million Jackson Health’s 2015 budget surplus, a record

Miami-Dade voters ratified the referendum in November 2013, opening an era of optimism for Jackson and opening the door for a renewed commitment to UM.

As a result, Goldschmidt said, “There was an opportunity to envision and strategize the future together. Believe it or not, we did not really strategize together before that.”

Goldschmidt readily concedes that “the two institutions will never agree on what is the right level of funding.” But he is enthusiastic about future collaborations. Migoya said Jackson and UHealth recently signed an agreement to brand a series of new urgent care centers opening through Miami-Dade as “UHealth at Jackson.”

UHealth also has begun to staff physicians at Jackson’s satellite hospitals in South Miami-Dade and North Miami Beach, while the two institutions continue to partner on a burn center, Ryder Trauma Center, and the Miami Transplant Institute, among other projects.

“Carlos has demonstrated he values the long-term relationship between UHealth and Jackson,” Steve Altschuler, a physician and chief executive of UHealth, said in a written statement. “I am confident that we will continue to partner in new ways.”

While the future likely holds more partnerships between the two institutions, Migoya and his team have labored to reform Jackson’s image from a hospital of last resort for the poor to the medical center of choice for Miami-Dade.

Arriola believes Migoya is succeeding on that front, too. Patient admissions are up by 6.6 percent over the past five years, and more of those patients have health insurance, he said.

“All the growth in admission is from paying clients,” Arriola said. “What does that tell you? That we have a hell of a hospital.”

Carlos Migoya, president and CEO of Jackson Health System, talks about working with the legislature to fight for Medicaid expansion.

Migoya said he has reduced Jackson’s burden of uninsured residents in part through more aggressive screening of indigent patients for public assistance programs, such as Medicaid.

But his leadership also has been marked by complaints that Jackson administrators have created barriers for low-income Miami-Dade residents to receive free and reduced-cost care — a central tenet of Jackson’s mission.

“It’s just really hard to get into Jackson,” said Miriam Harmatz, an attorney with Florida Legal Services, a nonprofit that advocates for healthcare access for Miami-Dade’s poor. “There are a lot of barriers put up by the intake eligibility system that make it very difficult for low-income residents to qualify.”

Among the documents required for Miami-Dade residents seeking charity care are proof of residency, income and signed affidavits detailing how an applicant meets personal financial obligations. And even when low-income residents qualify for charity care at Jackson, Harmatz said, they often cannot afford the co-payment for specialists and prescription drugs.

Migoya counters that he’s a steward of public money, and that not everyone who applies for charity care really needs it. He said that some Miami-Dade residents apply even though they own thriving small businesses and expensive homes.

“Dade County has always been a place where people have learned how to play games,” he said. “We’re not going to give it away to the people that don’t deserve it.”

Carlos Migoya, president and CEO of Jackson Health System, says he’s a steward of public money, and that not everyone who applies for charity care really needs it.

Harmatz said she understands there’s not enough money to care for every uninsured, low-income adult in Miami-Dade. “But this is not a transparent way to deal with those lack of resources,” she said. “All of that should be talked about in transparent ways and helping the public understand that we need to get more funding into the healthcare system.”

Migoya agrees that Miami-Dade’s healthcare system could use a funding boost, but he said his goal is to transform Jackson into a sustainable organization that one day will no longer need the county taxpayers’ largesse to make ends meet.

“My goal,” he said, “is for 15 to 20 years from now for Jackson to be totally independent. I think it can get there.”

Financial independence for Jackson, he said, would make more county funding available for public health needs.

Migoya said he doesn’t expect to be leading Jackson that long into the future, though he expects his employment contract will be renewed when it expires in May 2017. He said he plans to see the current building projects through construction, but it’s the work he is doing now on programs that will really matter — to the future of Miami-Dade, and to his place in its history.

“Everybody looks at the pretty buildings and they say, ‘That’s the legacy,’ ” he said. “To me, it’s what’s in the buildings that’s the legacy. It’s the ability to provide world class healthcare in those buildings that’s going to be the important piece.”