A meeting to renew the annual operating agreement between Jackson Health System and the University of Miami Health System or UHealth — valued at $141.6 million for the coming year — briefly turned into a high-stakes poker match on Wednesday with Jackson’s board chairman threatening to put the entire deal on the line if UHealth did not make a long-term commitment that its doctors will perform organ transplants exclusively at Miami-Dade’s public hospital network.
Members of the Public Health Trust that oversees Jackson eventually gave their unanimous approval to the annual agreement and to a separate one-year deal, which will pay UHealth about $5.5 million for its surgeons to operate at the Miami Transplant Institute, a joint partnership that began in 1970 and does more than 500 transplants a year.
But Jackson officials still want a long-term extension from UHealth on the transplant exclusivity agreement, which expires in June 2018, because the public hospital system has begun to design a new tower to house the Miami Transplant Institute, intensive care units and emergency rooms.
The projected cost of the new tower: $484 million in taxpayer funds.
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The new annual operating agreement between Jackson Health System and the University of Miami Health System includes pay-for-performance incentives and penalties, including a measure for meeting attendance by UM program directors and Jackson residents.
Joe Arriola, board chairman for Jackson, was clearly frustrated that the two institutions had not yet reached a deal ensuring that UHealth would continue to provide the premiere service only at Jackson well into the future.
“We’re thinking of building this magnificent facility for transplant,” he said, “and now it’s my understanding that the university has not agreed to give us a long-term commitment.”
Jackson CEO Carlos Migoya said he has had conversations with Steve Altschuler, CEO of UHealth, who attended Wednesday’s meeting, about the future of the transplant program. He said both parties have agreed to negotiate a long-term exclusivity contract over the next three months.
“If we don’t work it out in that 90-day period,” Migoya said, looking to Arriola, “then we choose not to do the new facility. I know that’s not what you want. It’s not what we want.”
Arriola noted that in 2012 the university filed a letter of intent with state regulators to do adult heart, lung, kidney and liver transplants at the University of Miami Hospital, across the street from Jackson Memorial.
UM later withdrew the letter of intent, and the two institutions renewed the exclusivity agreement in June 2014.
“I want to be very clear,” Arriola said, raising his voice. “If we don’t have an answer in the next 90 days ... I want to reopen this thing and we will not have a negotiation on the same terms.”
533 Number of organ transplants performed at Miami Transplant Institute in 2015
Arriola said every part of the operating agreement — from trauma services to pediatrics, obstetrics and neurology — would be open to negotiation without a long-term deal on transplant.
Altschuler appeared unfazed. “Relationships go up and down over many years,” he said. “Each sides have their issues. ... In terms of transplant, I was literally presented with this plan three days ago.”
“That’s not our fault,” Arriola snapped.
“Whose fault is it?” Altschuler asked.
“You should know what the heck is going on at your hospital,” Arriola said, slapping his hand on the table for emphasis. “You've been here six months. Transplant is very important. We do an annual operating agreement. This is part of it, and I don’t want to hear you were presented with this three days ago. That’s not an excuse. I’m not accepting that.”
Altschuler, a mathematician and physician who began as UHealth CEO in January, noted that for 15 years he led the Children’s Hospital of Philadelphia, which operates a pediatric transplant center.
“For us to participate,” Altschuler said, “I have to be sure we have a world class institution, and I think I have the credibility and experience to do that. I will not be forced to do a deal for 15 years until I’m really sure that this will be world class.”
I have to be sure we have a world class institution.
Steve Altschuler, CEO of UHealth
He said transplantation is evolving from solid organs to cellular transplants, and later noted as an example the development of pancreatic cell transplants by the UM medical school’s Diabetes Research Institute as a potential cure for diabetes.
“That’s why this needs real thought,” Altschuler said. “This is not a business decision. This is a scientific decision, with the science driving where the business is going to go.”
UHealth provides more than 90 percent of the physicians who work at Jackson, including exclusive arrangements in trauma, obstetrics, neurology and other areas.
Don Steigman, chief operating officer for Jackson, noted that many of the public hospital system’s enhanced services are due to the work of UHealth physicians, including neonatal intensive care.
The annual operating agreement is valued at $141.6 million and includes payment of $31.3 to UHealth for pre-transplant work, organ purchases and specialized lab testing.
“It’s tough for us to go back, nor do we want to go back on enhanced services,” Steigman said.
By the end of the meeting, Arriola agreed and joined his fellow trustees in approving the annual operating agreement and the one-year transplant contract.
The current transplant exclusivity agreement runs through May 2018 and calls for an automatic renewal for no more than three five-year terms — unless either institution opts out with a one-year notice.
Later in the afternoon, at a second meeting of Jackson’s board, Arriola struck a hopeful tone that Jackson and UHealth would commit to a long-term relationship on transplants while lamenting that “I still sense a lack of that two-way street and openness that I would love to see” between the institutions.
“I hope I will have to eat crow and everything is going to be wonderful and perfect,” he said. “Nothing would make me happier.”