Your taxes are paying for this $1.5 billion makeover to Miami’s public hospital system

May 09--Not a lot of hospitals have campaign promises to keep.

After persuading Miami-Dade voters to approve $830 million in debt bonds for a 10-year renovation and expansion plan in 2013, Jackson Health System leaders say the vision they campaigned on -- that the upgrades would even the playing field between the county's public hospital and South Florida's private and nonprofit medical centers -- is beginning to take shape.

Building permits have been filed for a $175 million rehabilitation hospital and research center at Jackson Memorial in Miami. Crews have begun demolishing a vacant warehouse on a 27-acre lot off the Palmetto Expressway and Northwest 25th Street where Jackson West, a $250 million medical campus, will rise in Doral. And three new urgent care centers, co-branded with the University of Miami Health System, have opened in Country Walk, Cutler Bay and North Miami -- with two more planned for Doral and Miami Gardens.

At each of Jackson Health's three campuses in Miami, North Miami Beach and South Miami-Dade, construction crews are working on improvements -- remodeled patient rooms and floors, new technology and equipment among them.

"What we committed to up front, we are fulfilling that commitment," said Don Steigman, Jackson Health's chief operating officer. "We're in the midst, at every one of our facilities, of doing what we said we were going to do."

Jackson Health leaders said the upgrades would help transform Jackson Health from a hospital of last resort to the provider of choice for all of Miami-Dade.

The public hospital system's facilities and infrastructure are some of the oldest in the region. Its sprawling main campus in Miami is difficult to navigate and far from the suburbs, where most people live. And its hospitals and emergency rooms care for more homeless and uninsured patients than any healthcare system in Miami-Dade.

Other hospital systems have more modern buildings, with elegant lobbies and patient rooms that resemble hotel suites. Many are located in Miami's bedroom communities. Their patients are more likely to have private health insurance coverage.

And unlike the taxpayer-owned Jackson Health, the competition is not bound by a public mission to provide care to everyone in Miami-Dade, regardless of ability to pay. Jackson Health also provides healthcare to inmates of the county's jails and the system operates two nursing homes and a network of community clinics.

By drawing in more insured patients, Steigman said, Jackson Health can ensure that its future -- and the hospital system's ability to carry out its public service mission -- will be secure.

"We want to get more people into the Jackson facilities that can pay," he said, "so we can serve everyone in Miami-Dade."

In total, Jackson Health's renovation and expansion will cost $1.5 billion, financed by the voter-approved bonds, about $30 million in philanthropic donations and $640 million in financial reserves generated by the hospital system.

Plans leave little room for financial error because Jackson will fund nearly half the costs with capital reserves, which will require the public hospital system to at least break even or produce a profit each year.

During that time, Jackson Health will still have to meet its public health mission, including medical services to Miami-Dade jail inmates, which administrators say cost more than the $442 million in local taxpayer support it will receive in 2018.

"We know our mission is to serve all walks of the community," Steigman said. "And we need to make sure that we're providing that care."

Of the $830 million in public financing, about $570 million has been committed to projects so far, including $213 million for hospital upgrades, $152 million for technology and equipment, $149 million for new facilities and $56 million for infrastructure.

Miami-Dade officials estimate that the total cost of repaying the bonds using county property taxes will be about $1.4 billion over 30 years.

Spending of the voter-approved funds is overseen by an 11-member Citizens Advisory Committee that signs off on every dollar used in the building plan, said Martha Baker, a registered nurse and member of the panel.

Baker, who is president of Jackson Health's labor union for doctors and nurses, said the money has been spent according to the ballot language that voters ratified in 2013.

"It looks very squeaky clean," she said.

The oversight panel also ensures that locally owned businesses are hired to perform much of the renovation and expansion work under the county's Small Business Enterprise contracting requirements. But Jackson Health also has launched a mentoring program that pairs small local firms with large multinational contractors.

In the past, Jackson Health's building contracts met the county's small business hiring requirements through labor, said Isabel Nunez, Jackson Health's project manager for the building campaign. The mentoring program is designed to help those local small businesses gain experience in the highly regulated field of healthcare, she said.

Baker said the mentoring program has had a dual benefit for Miami-Dade.

"Not only will this $830 million help build for Jackson new buildings for the next 50, 100 years, but it also helps the economic health of the community," she said. "We've given jobs to locals and trained them and brought their skill sets up."

Jackson Health's building campaign, though, was sold to voters as the best way to ensure the public hospital system's future.

As home to Miami-Dade's first trauma center and the state's busiest organ transplant hospital, Jackson Health long has held a reputation for providing state-of-the art care for the most complex medical cases. And its decades-long partnership with the University of Miami's Miller School of Medicine has cemented Jackson Health as the premier academic medical center in South Florida.

But years of financial mismanagement that led to near bankruptcy in 2011 left Jackson Health unable to renovate and expand its original facilities, buy new equipment or expand its provider networks -- leaving the public hospital system far behind its competitors.

Since then, new leadership at Jackson Health pulled the hospital system out of its financial tailspin by reducing staff, slashing operating costs, aggressively enrolling indigent patients into Medicaid, and other strategies. The result has been six consecutive years of budget surpluses that help build capital reserves.

If the hospital system is going to thrive, though, it will have to grow and not just cut costs, Steigman said.

As an example, he said, Jackson Health's new urgent care centers in Miami-Dade, particularly the $5.5 million center expected to open this year in Miami Gardens, will help the hospital system expand primary and preventive care, which is expected to reduce more expensive care for the uninsured in emergency rooms and to attract more paying customers to clinics that can feed patients into the system's hospitals.

Already, Steigman said, renovated maternity suites are beginning to attract more insured mothers.

"We've seen a bump up," he said. "So people are coming to us ... where before we didn't' have it. Why? We renovated the suites."

Another bright side to Jackson Health's future: a building boom in Miami's downtown area, which is expected to benefit Jackson Memorial as more people seek care close to home, said Matt Pinzur, Jackson Health's chief marketing officer.

"When you have more people living in the urban core, and we are in the urban core, that's only going to help us," Pinzur said.

One of the signature projects in Jackson Health's building plan is the Christine E. Lynn Rehabilitation Center For The Miami Project To Cure Paralysis at UHealth/Jackson Memorial Medical Center -- an 80-bed rehabilitation hospital and research center that's expected to draw patients from across the country.

The rehabilitation hospital will integrate patients and therapists with UM researchers working on the same floors, Steigman said, giving Jackson Health the opportunity to provide even more care for patients recovering from strokes, heart attacks, organ transplants and other medical services already provided at the hospital system.

"We'll be able to perform the whole care from start to finish," he said.

In Doral, though, Jackson Health's expansion plans have been checked by the state Agency for Health Care Administration, which rescinded the public hospital system's certificate of need for a 100-bed hospital in the west Miami-Dade suburb after a competing hospital system, HCA Florida, appealed the state's approval.

Steigman said Jackson Health is appealing the state regulator's action, but that the hospital system will move forward with the rest of its plans for the Doral campus, including a stand-alone emergency room, a pediatric outpatient center, and physician and diagnostic offices.

The hospital, he said, will be built in a second phase if Jackson Health wins the appeal to the state's Division of Administrative Hearings.

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