Panel Says Jackson Health System Should Be Nonprofit

MIAMI (CBS4)- A task force of Miami-Dade healthcare executives has finished a report recommending that Jackson Health System be converted to a nonprofit entity run by a small, independent board separated as much as possible from county politics.

The group urged the county commission to pursue "an aggressive timetable" in setting up the nonprofit, which it proposed be governed by nine persons, with five initial appointments made by the mayor and four by the commission, with members including at least one physician, one lawyer, two accountants and one insurance executive. After the initial appointments to staggered terms, the board would become self-perpetuating.

A "public health advisory committee" would monitor how the new entity spent local tax money, which now totals about $350 million a year, according to CBS4 news partner The Miami Herald.

The report's concepts were finalized by the panel late Thursday. Task Force Chairman Juan C. Zapata said he hopes to send the final report to the county commission on Monday. Commission Chairman Joe Martinez has said that he would push for public meetings on the issue before the commission voted.

Saying Jackson's mission of treating the poor and uninsured is "in jeopardy," the group said a small nonprofit board was needed to allow Jackson to make fast changes to be competitive and to stem losses which have totaled $337 million the past two years and may reach $100 million this fiscal year.

The task force consists of six hospital chief executives, President Donna Shalala of the University of Miami, and other major leaders. It was appointed by the county commission on the urging of Commissioner Rebeca Sosa. For much of its six weeks of meetings, Zapata steered the group toward offering the commission an array of alternatives to consider, but near the end of its deliberations, members expressed a strong sentiment for a nonprofit entity, which was supported by 19 of its 20 members, according to the Herald.

The lone dissenter was Martha Baker, president of SEIU Local 1991, who believes strongly Jackson should remain as is – essentially a department of county government. "I am opposed to too many changes too fast," Baker told the group Thursday. Jackson's new chief executive, Carlos Migoya, started two weeks ago, and a new governing body, the seven-member Financial Recovery Board, is scheduled to have its first meeting Monday.

Last August, a Miami-Dade grand jury recommended that Jackson's governance structure be changed to fix the "colossal mess" that the public system had become. A group of 41 Miami-Dade business and civic leaders agreed, noting that in recent years 90 percent of American public hospitals "have restructured their governance to be insulated from political pressure."

Two frequently cited examples are Tampa General and Grady Health System in Atlanta, both of which have nonprofit companies operating facilities that remain owned by local governments, with oversight groups making certain that the poor are well served and the tax dollars spent appropriately.

Polishing a draft proposal Thursday, the group debated whether an oversight group was needed, how much power it should have and what it should be called. Steven Sonenreich, chief executive of the Mount Sinai Medical Center, worried that an oversight group would be "just another level of bureaucracy."

Ed Feller, a physician on the task force, said politicians and taxpayers will insist on at least minimal oversight. "Without an oversight group this is politically dead in Miami-Dade County." The task force decided to call the proposed entity "the public health advisory committee."

At the urging of Lillian Rivera, head of the Miami-Dade County Health Department, the committee will also be tasked with the county's overall health needs, assessing not only hospitals but also the clinics that provide primary care. "Our system is fragmented," said Rivera. "Our system is broken. We need this oversight desperately."

The task force spent more than an hour Thursday trying to toughen the ethics section after several members expressed dismay that the county commission on Tuesday appointed to the new recovery board Joe Arriola, who had resigned from the University of Miami trustee board five days before. The university receives about $135 million a year from Jackson and owns a hospital across the street from Jackson Memorial.

"That should not have been allowed," said Ana Mederos, chief executive of Palmetto General, speaking of the Arriola appointment.

"Just because somebody resigned, that to me doesn't remove the perception" of conflict of interest, said Zapata.

Linda Quick, president of the South Florida Hospital and Healthcare Association, said, "The universities are stakeholders. The unions are stakeholders. We don't want those people on this board." Under the present Recovery Board, the unions are also allowed to select a board member.

M. Narendra Kini, chief executive of Miami Children's Hospital, was adamant that he would not sign any report that didn't exclude stakeholders from board membership. "The destruction of the system has been primarily the result of the … stakeholders."

The task force estimated it might take a year or more to do the complex conversion to a nonprofit. One crucial issue would be getting the Legislature to grant the new entity "sovereign immunity," limiting malpractice liability, a status that government hospitals have. It's also possible state and local law would have to be changed to allow the new entity to receive a half-penny sales tax, funds that by law are intended only for a "county public hospital."

For more than 35 years, Jackson has been governed by a Public Health Trust board which in its most recent form consisted of 17 members. Critics complained that board talked a lot and did little. Recently Commissioner Martinez led a move that shut down the Trust board and replaced it with the seven-member Recovery Board, which by statute is intended to last no more than two years.

That new board was formed for what Martinez called a "phase one" of Jackson governance, with the task force developing concepts that could lead to "phase two."

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