Jackson Health System
Fri November 1, 2013
County Hospital Seeks Taxpayer Help To Attract Obamacare Customers
Jackson Health System wants to go after formerly uninsured individuals now receiving coverage under the Affordable Care Act. Because insured customers have increasingly been choosing hospitals with snazzier facilities, Jackson is asking Miami-Dade County voters to raise their own property taxes to cover a top-to-bottom remake of the hospital system.
If the referendum passes on Tuesday, JHS will issue bonds to raise $830 million for the renovations. The bond debt would add about $50 to the average county taxpayer's yearly tax bill.
Jackson's primary asset is its stellar medical reputation. But hospital officials believe the dowdy and dated appearance of the state's largest hospital is costing them money.
"We don't have to look like the Taj Mahal," Jackson CEO Carlos Migoya told the Miami Herald. "But we need to look like the academic center we are."
The development plan calls for expansion and renovation at Jackson's main Civic Center campus with room upgrades to improve the "patient experience." That's an important financial consideration since Medicare and some other payers now link some portions of reimbursement to "patient satisfaction" scores.
In addition to information technology upgrades and better hospital parking lots, the money will provide a lot of new medical facilities, including a network of urgent-care centers, a children's ambulatory center and a new, $70 million rehabilitation hospital that will anchor Jackson's new business plan.
Independent health-policy consultant Allan Baumgarten says it will position Jackson to compete for paying patients seeking profitable elective procedures that could balance expenses and tilt Jackson finances well into the black.
"I think you can make an economic case that these improvements will have a positive effect on the mix of patients [Jackson] attracts," Baumgarten said, "and that improved patient mix will directly translate to an improved bottom line for the hospital."
On the other end of the patent mix are the low-income, frequently uninsured people whom Jackson is required to treat in its emergency room, often for free. The cost of that free care nearly drove the hospital into bankruptcy two years ago.
Now, with the ACA, things will be changing.
Many of those uninsured will qualify for health insurance under the health-care reform law and, if they can finally pay for their own care, Jackson won't want to lose them to hospitals that don't share its safety-net responsibilities.
"[Jackson is] going to be competing for the patients that used to go there that couldn't go anywhere else," said former hospital CEO Salvatore Barbera, now a professor at Florida International University's health care administration department.
But Barbera believes the poor, many with bottom-tier Obamacare policies, could continue to burden Jackson's finances.
"Some of those plans out there have incredibly high deductibles. Patients who come to a hospital with those high-deductible plans are going to be facing huge out-of-pocket expenses and it’s going to result in a lot of bad debt for hospitals," Barbera said.
Jackson already consumes a lot of taxpayer money -- more than a third of a billion dollars a year in property tax revenue and the proceeds of a half-cent sales tax. Critics have said the hospital hasn't been accountable for the sales-tax revenue and they're calling for the creation of a special oversight board to make sure the bond money is spent as promised.
But the 95-year-old hospital still enjoys a lot of community respect and affection and the proposed bond issue's list of endorsers is long and varied.
"Everybody knows Jackson's professionalism is second to none, " said Helena Poleo, who leads the bond issue campaign organization, Citizens for a Healthy Miami-Dade. "But its facilities haven't been modernized for decades."