Major hospital system in Miami in ‘death spiral’ as it runs low on cash, may lose suppliers

Big Miami-Dade hospital system nears insolvency

MIAMI — The major hospital network Miami relies on for trauma care is close to insolvency and could be cut off by suppliers.

Jackson Health System executives surprised their governing board late Tuesday with news the six-hospital chain is teetering on the brink of insolvency. Major vendor Johnson & Johnson may shut off supplies unless it receives a $1 million payment this week, they said.

“We are very close, if not already in, a health care death spiral,” Chief Operating Officer David Small said. “Any day now, some surgeon might call me up, saying we don’t have supplies, I can’t operate.”

Jackson Memorial is the only Level 1 trauma center set up to provide emergency care around the clock in Miami-Dade, the most populous county in Florida and the 8th largest in the nation.

A spokeswoman for Jackson Health System did not immediately have a comment early Wednesday.

Hospital administrators are asking the county for a $67 million advance to avoid coming within a day and a half of exhausting operating cash by April 5. They say they need the money to bridge a gap until a state-federal payment of about $90 million arrives at the end of the April.

“This is horrendous,” Treasurer Marcos Lapciuc said. “This is basic, total insolvency.”

CEO Eneida Roldan has suggested closing the suburban Jackson North and Jackson South branches, which would leave Jackson Memorial and a children’s hospital, a mental health facility and a rehabilitation hospital.

It’s not entirely clear how things got so bad, but part of the problem is that Jackson emergency rooms are magnets for the uninsured.

“The brand of Jackson is all about being a safety net,” Roldan said.

For example, 45 percent of ER patients at Jackson South were uninsured, compared with far lower rates at three other facilities within 15 miles: 12 percent at Baptist Hospital, 15 percent at Kendall Regional and 25 percent at Homestead.

The closing of Jackson South would mean cutting losses on a $102 million addition already 40 percent built. Roldan said it makes more sense to stop construction than spend $60 million to finish it; that facility alone was expected to lose $20 million to $25 million this fiscal year.

“We have to look at all the realities,” Roldan said. “At this point, it’s going to come down to a profit-and-loss analysis.”

Information from: The Miami Herald, www.herald.com