Wednesday, 02 February 2011 17:25

Jackson's Institutional Incompetence

by Manuel Rodriguez

 

Miami-Dade County's Jackson Memorial Hospital is Adrift in a Sea of Incompetent Executive Management

The utter contempt that Jackson Memorial Hospital’s managing board, the Public Health Trust, and the Miami-Dade County Commission, have displayed for the residents of Miami-Dade County and the Jackson health system has reached a new high.

 

The Miami Herald reports, here, that the treasurer of Jackson Health System’s governing board noted this week that cash is getting “dangerously low” and that major cost cuts may be needed. Currently, Jackson will likely end the month of January with only 16.7 days of cash on hand. Hospital’s median day’s cash on hand is closer to 90 days cash, making Jackson’s days cash on hand ratio abysmal, and a true operating emergency.

Additionally, Jackson experienced a 7 percent drop in patient revenue, a material and significant decrease to any business entity. The impact on Jackson, though, is pronounced, given its already weakened financial condition and its primary mission of serving the uninsured.

Jackson’s real problems are the result of institutional ignorance and complacency. This author was briefly involved in the nomination process to sit on the Public Health Trust, and met with a panel of Miami-Dade County commissioners, Florida legislators, Public Health Trust members, and other important local politicians.

A 3 hour panel discussion ensued regarding Jackson’s status, and it became painfully obvious that the current Public Health Trust Board and the Miami-Dade County Commission are truly ignorant of the financial status of the hospital. This author reviewed over 1000 pages of material in preparation for the discussion, much of it dense financial data. It quickly became apparent that most of the people sitting on that panel had little knowledge of the contents.

The questions posed to this author were mostly superficial and chosen to deflect attention from the institutional incompetency that has seized Jackson for much of the last 2 decades. The issues being confronted by Jackson were merely magnified by the current economic crisis, but were certainly not caused by it.

The author reviewed a “stop-gap” financial proposal to immediately enhance revenues and reduce costs at the hospital, and noted that the nearly 100 planned initiatives should be vetted for reasonableness and predictability. Institutional initiatives aimed at closing financial shortfalls frequently fail due overeager management’s failure to account for the many inherent pitfalls.

Regrettably, the Herald notes that many of the 94 initiatives, worth $200 million in reduced costs or increased revenue, are already behind schedule. Is it any wonder, though, that the board and county commission, largely comprised of non-financial laypeople, are sufficiently competent to make complex business decisions in a vacuum? This author noted that at least 4 prospective Public Health Trust candidates had significant financial statement and business modeling experience. Of those 4 highly qualified candidates, how many were chosen: Zero.

Past boards and county commissions have largely applied super-sized Band-Aid’s when dealing with Jackson’s problems, including accounting gimmickry, financial speculation with new revenue streams, and other one-time financial gambits designed to kick the deep, structural problems to new generations, including Jackson’s onerous labor costs. Unfortunately, that day of reckoning has begun arriving. Like the leading edge of a large hurricane, the gail force winds of this impending crisis have already swamped management’s coping ability. The resulting financial hurricane could cause the residents of Miami-Dade County to feel unimaginable pain, as care will likely have to be significantly reduced to uninsured residents.

Jackson’s institutional incompetence not only impacts Miami-Dade County’s bottom line, but very difficult and highly controversial quality of care decisions are forthcoming, and none of them will likely enhance care provided to the most impoverished of this community. How such an important institution has been allowed to decay into this abyss is criminal, how no one has noticed the contempt demonstrated by its leaders is frightening.

 

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