Jackson Health System board to hold private meeting on system’s future

The Miami Herald

By John Dorschner
jdorschner@MiamiHerald.com

   University of Miami Health System now operates at the former Cedar Medical Center on Wednesday, November 8, 2011 in Miami, Florida.
After months of preparation and years of discussion, Jackson Health System’s executive team has crafted a strategic plan to turn around the financially distressed public hospitals, which have lost more than $400 million over the past three years.The plan’s details are scheduled to be revealed Tuesday — to board members only, in a private meeting at a hotel.

Taxpayers, who give about $330 million a year to the beleaguered Miami-Dade system, won’t be allowed to listen. Neither will the county commissioners who oversee the county’s public hospitals. Nor the 10,500 workers whose livelihoods depend on Jackson.

The reason for the secrecy: “We don’t want our competitors to know what we’re planning,” said Jackson Chief Executive Carlos Migoya.

Florida’s Sunshine Law is one of the most open in the country for public access to government records and meetings, but Florida Statute 395.3035(2b) has a specific exemption allowing public hospitals to close a meeting to discuss details of “a strategic plan, the disclosure of which would be reasonably likely to be used by a competitor to frustrate, circumvent, or exploit the purpose of the plan before it is implemented.”

The Tuesday meeting will be held at the Embassy Suites near Miami International Airport. Board Chairman Marcos Lapciuc said Friday there would be brief public meetings before and after the private session.

The Jackson plan will be the work of Donn Szaro, a veteran healthcare consultant who had never worked for a hospital before becoming Jackson’s chief strategy officer in May at an annual salary of $500,000. Also developing the plan is Fernando Salgado, a former executive with IBM and General Electric who, again, never worked for a hospital until he became the $450,000-a-year chief transformation officer in May.

Together, they will explain to Jackson’s seven-member board the specifics of the plan to pull Jackson back from the brink of financial disaster, details they want to keep secret from competitors like Brian Keeley, the experienced CEO of Baptist Health South Florida, the area’s most successful hospital group.

Stephen Dresnick, a Miami physician and healthcare consultant, is skeptical that any worthwhile ideas will emerge from the discussion.

“What could possibly be new and different from the hundreds of things that were presented during the budget process?” he said. “. . . The issues facing Jackson have nothing to do with competition.”

Another consultant who follows Jackson closely, Joshua Nemzoff, says he understands why hospitals want to discuss strategy in private. He speculated that the private talks would focus on “closing services and firing people. That’s the only way they’re going to save the system.”

But Assistant County Attorney Valda Christian says service reductions and layoffs cannot legally be discussed at a closed-door meeting. The statute lists eight approved topics, most of which emphasize expanding or creating services, including by purchasing new facilities.

How can the public know that the board is not talking behind closed doors about cutting services or closing facilities? Christian says someone from the county attorney’s office will attend to advise the board. Also, the statute requires that a court reporter transcribe the proceedings. The transcript will become public no later than three years after the meeting.

Approval of a formal strategic plan must be done at a public meeting. Szaro said Jackson would release “something about the plan” after the private meeting so the public can “understand the direction the hospital is taking. We just can’t continue to reduce expenses.”

In just the past two weeks, Jackson has ordered two weeks of unpaid furlough for most employees and abolished 140 positions as it faces the bleak possibility of having 11.8 days of cash on hand in December — less than one-tenth of what financially healthy hospitals keep in the bank.

One likely subject for the strategy session is Jackson’s delicate relationship with the University of Miami, which supplies most doctors that treat Jackson Memorial Hospital patients — but also has its own hospital across the street. Migoya has said he wants the prestige of having UM doctors at Jackson Memorial but also wants to reduce Jackson’s dependence on UM, a complex situation that executives might want to develop in private.

Among the board members likely to be part of that discussion: Joe Arriola, a Jackson board member and former UM trustee.

Last year, when Jackson was still governed by a 17-member board, Arriola was UM’s officially designated member. When the smaller Financial Recovery Board for Jackson was created in May, County Commission Chairman Joe Martinez wanted to name Arriola as the UM member, but several commissioners complained of a conflict of interest because UM did business with Jackson. Arriola then resigned from the UM board and, several days later, the commission named him to Jackson’s board.

A special Miami-Dade hospital governance task force, made up of 20 healthcare leaders studying Jackson’s future, recommended in May that Jackson board members “shall have no conflicts of interest for one year before” being appointed. Last Tuesday, the County Commission approved that provision.

On Thursday, during a break in board committee meetings, a Miami Herald reporter asked Arriola whether he planned to tell UM what was discussed during the closed strategy session. In front of several dozen people, Arriola shouted: “Don’t you question my ethics. Don’t you ever question my ethics. If you do that again, I’m going to throw you out the f–king window.”

Later, when the meeting resumed, Arriola announced he “wanted to clarify” why he had “lost my temper.” He said “my integrity was questioned by The Miami Herald.”

He said he had worked hard for Jackson: “I don’t need anyone questioning that. My loyalties have been at [Jackson] for quite a while. . . . I don’t need any low-life questioning my ethics.”

The other board members likely to be present at the closed-door session: Michael Bileca, Joaquin del Cueto, Stephen Nuell, Darryl Sharpton and Lapciuc, the chairman.

Jackson’s strategy, like the strategy of any public hospital, is likely to focus on finding ways to bring in more paying patients to make up for the poor and uninsured patients the system treats. This has been the mantra of Jackson leaders for years.

In 2009, then-Chief Executive Eneida Roldan said developing a strategic plan was a major objective, but the effort moved slowly. Martha Baker, president of the Service Employees International Union local, which represents nurses and other healthcare professionals, has repeatedly said Jackson needs a strategic plan to bring in new patients rather than trying to solve its problems by reducing workers’ pay.

In March 2011, plans were in the works for an outside consultant to draw up a strategic plan for $750,000, but once Roldan announced she was leaving, the board postponed action until a successor was named. When Migoya started May 1, he said he wanted to hire in-house experts to craft a plan.

On Thursday, Szaro told Jackson’s board that he has been working “for quite a while” on the strategic plan. He encouraged board members to offer input when they receive their work packets, which will be scrutinized by the county attorney’s office.

Don Steigman, Jackson’s chief operating officer, said Thursday he hopes the closed-door meeting can help Jackson win more managed-care contracts. Jackson’s high expenses and patients’ longer-than-average lengths of stay tend to frighten insurers.

Salgado said he hopes the board will discuss ways to bring in patients with better-paying insurance rather than the uninsured or the poor who have low-paying Medicaid. This, too, has been a long-running theme at Jackson.


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