Jackson Health System out-sources a service for $37.5 million [The Miami Herald]

Nov. 29--Jackson Health System's board on Monday approved a $37.5 million, three-year contract with Atlanta-based Chamberlin Edmonds & Associates to take over the services that attempt to qualify uninsured patients for Medicaid or disability insurance.

The move will save Jackson about $2.5 million, Chief Financial Officer Mark Knight told the board. The outsourcing will eliminate 26 Jackson jobs -- part of the 240 job cuts that Chief Executive Carlos Migoya announced two weeks ago.

Board member Joaquin del Cueto pointed out that initial results of a comparison test between the Jackson employees and the CEA staff, most of whom are former state employees, found that the Jackson employees did better. Knight said that was true, but as the months went by, the CEA staff improved.

In a report on Jackson's finances, Knight said several times that projected savings on labor costs had not yet materialized because collective bargaining continues with unions, one reason Jackson continues to struggle financially. The system lost $9.6 million in October, and Knight projected "a fairly significant loss" in November.

One positive development, Knight noted: Software is finally running so that Jackson executives for the first time will know fully allocated costs and revenue for general lines of service, such as cardiology or urology. Eventually, the programs should be able to determine profitability of individual patients. Critics for years have decried Jackson executives' inability to know which services were profitable and which were money losers.

In other developments at the board's monthly meeting, Migoya and Pascal Goldschmidt, dean of the University of Miami medical school, said they were cooperating despite protracted discussions about their annual operating agreement. Jackson is looking for $50 million in savings, both in lower payments to UM and more efficient performances by the UM faculty who make up 98 percent of Jackson Memorial's physician staff.

Migoya called the relationship "an evolving partnership" in which both institutions are "in flux." He said it would be "irresponsible and incorrect" to say the two huge institutions might divorce. "We will not grow into our best future unless we grow together."

UM's Goldschmidt said, "We have a really extremely constructive relationship with the leadership team currently in place." He said the new annual operating agreement would create "a full agreement on what constitutes a Jackson patient" so that there would be "no confusion in anyone's mind" about allegations that UM is stealing Jackson patients.

Goldschmidt said, "Anyone who will not respect [the agreement] will see consequences."

Jackson board Chairman Marcos Lapciuc has asked that UM doctors be penalized if they are caught shifting patients from Jackson to UM.

UM's medical enterprise has its own financial challenges, with $18 million in losses through Aug. 31, the first three months of its fiscal year. After the board meeting, the dean acknowledged that UM is instituting a soft hiring freeze, limiting travel and imposing other measures to control costs. He called such moves "careful management."

Goldschmidt said the UM Hospital, the former Cedars Medical Center, is a well-run operation, but the challenge is the same for many medical schools, with the hospital needing to make up for losses in research and education areas.

Goldschmidt reiterated that it is unfair to blame UM's purchase of Cedars for all of Jackson's financial woes that have resulted in $420 million in losses over the past three years.. He pointed to a speech by former Jackson Chief Executive Marvin O'Quinn in 2006, before UM bought the hospital, warning that Jackson faced dire days unless major changes were made.

___

(c)2011 The Miami Herald

Visit The Miami Herald at www.miamiherald.com

Distributed by MCT Information Services