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Latest News - February 2012

February 28, 2012
Jackson Health System to cut 1,115 jobs
Source: The Miami Herald
By: John Dorschner

Jackson announces new job cuts amounting to 10 percent of its workforce, as the public hospital system continues to struggle for its financial footing.

Jackson Health System announced Tuesday it is cutting 1,115 jobs, for a net savings of $69 million annually in an attempt to stave off the possibility that the struggling public hospitals would run out of money by August.

Chief Executive Carlos Migoya said the moves were necessary to “right-size” the staff because of reduced numbers of patients. “We can’t afford to have extra staff,” he said at a press conference.

But at the same time, he announced that Jackson would add up to 350 part-time employees to provide flexible staffing to meet changing patient volumes. Factoring in both the reductions and additions, “Jackson will have approximately 10 percent fewer employees than it did last summer,” Migoya said in a memo to the Jackson board and South Florida political leaders.

Migoya said 920 people would be laid off and 195 vacant positions abolished. Those who lose their jobs couldbe first in line for part-time positions.

Martha Baker, president of SEIU Local 1991, which represents hospitals professionals at Jackson , said she was “appalled” by the announcement. “This is what you get when you hire a billionaire banker and then cut him loose to take a chainsaw to healthcare in Miami-Dade County,” she said in a written statement. “It’s unbelievable that he wouldn’t consult the nurses, doctors and healthcare professionals — who have sacrificed out of their pockets to keep Jackson afloat — about how his plan to ‘right size’ the system might harm patient care. We have no idea how Mr. Migoya thinks patient care can be maintained with such drastic cuts to frontline caregivers.”

Migoya said that patient care would not suffer and service wouldn’t be cut. Sal Barbera, a former hospital executive who teaches at Florida International University, praised Migoya’s move. “They’re doing it right,” he said, by allowing for more flexible staffing. “It is unheard of for a hospital not to have a nursing staff that’s capable of flexing depending on patient volume and acuity of illness.”

Stephen Dresnick, a physician and healthcare consultant, thought the massive layoff followed by hiring part-timers “is certainly not the way to go if you’re trying to develop a loyal and committed staff. I think it’s a very difficult thing to do in an environment where you already have a lot of very unhappy employees.”

Last spring, before he was hired, Migoya said he was opposed to mass layoffs because in such cases “you usually cut in the wrong places.” Last November, after six months as CEO, Migoya said, “You can’t cut your way to growth.”

On Tuesday, Migoya said that in long run he still believes cutting isn’t the answer but in the short term, he needed to make sure he had only the employees needed. He said that the eliminations were done only after careful department-by-department evaluation.

Adding part-time workers helps Jackson management get around a problem it had in hammering out a contract with SEIU Local 1991. Executives insisted they needed flexible work schedules for nurses, which most hospitals now have to adjust for varying patient populations. SEIU insisted on a guaranteed work week. The three-year contract, finalized earlier this month, maintained a guaranteed work week, but Tuesday’s announcement gave Jackson managers the flexibility they wanted.

The SEIU contracts for nurses, doctors and other healthcare professionals called for only a 3 percent reduction in base pay, but nurses lost eight personal leave days a year. That means the staff will be spending more time at work. Migoya said during negotiations he was planning for a smaller staff working more.

“In order to create the best environment for robust and sustained growth, we must start with a rock-solid foundation,” Migoya said in his memo.

Jackson’s January financial statements reported the system had 9,795 full-time equivalent employees, an accounting measure that slides down when employees take furlough days, goes up as part-timers are hired and adjusts for overtime. Migoya imposed furlough days for employees in December, January and February.

Spokesman Edwin O’Dell said that the system had 8,100 full-time employees as of Feb. 1, but that didn’t include about 1,000 resident doctors in training who are on the Jackson payroll. Migoya’s statement that Tuesday’s cuts represented a 10 percent reduction did not include residents, but did include other full and part-time employees.

Jackson has been adjusting to losses and reduced patient volumes for almost two years. The biggest previous mass layoff came in March 2010, when then-Chief Executive Eneida Roldan announced the elimination of 650 positions. Last November, Migoya announced the elimination of 240 positions, including firing 170 employees and abolishing 70 vacant positions.

Jackson has been under severe financial pressure since fiscal 2009, when it lost $244.6 million. The following year, it lost $93 million. On Monday, Chief Financial Officer Mark Knight said the audited loss for fiscal 2011, which ended Sept. 30, will be $82 million.

Through January, Jackson has lost $24.4 million for the current fiscal year. Some weeks ago, Knight projected that Jackson would be completely out of cash by August unless major steps were taken. On Tuesday, Migoya said that with the staff reductions, he expects Jackson to start showing surpluses by late summer or early fall.

That prediction might be upset by further reductions from Tallahassee. Though the House and Senate are now working out their differences, the House’s Medicaid proposals would mean a loss of about $45 million a year for Jackson, while the Senate version would mean a loss of about $85 million.

Gov. Rick Scott, former chief executive of the for-profit HCA hospital chain, has questioned the need for public hospitals such as Jackson. Plus, the Legislature is considering deregulating trauma centers, a change Jackson executives say could cause yet another major reduction in revenue.



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