Send Mercenaries, Guns, and Money? - Cerberus Tries to Buy Jackson Health

The latest twist in the tale of one of the US great safety-net public hospitals raises some interesting questions.  As <a href="http://www.miamiherald.com/2011/02/22/2079083/boston-firm-offers-600-million.html">reported</a> by John Dorschner in the Miami Herald, Jackson Health System has had some bad times:<br /><blockquote>the system, ... has served for a century as <em>Miami-Dade County’s safety net healthcare system for the poor and uninsured. But money and management woes in recent years have pushed the system to the brink </em>of failure time and again. Last week, its executives said it would run out of cash in July unless drastic measures are taken.</blockquote><strong>The Bid for Jackson Health</strong><br /><br />The latest drastic measure proposed was a take-over by a for-profit corporation, one that <a href="http://hcrenewal.blogspot.com/search/label/Cerberus">we have heard of before:</a><br /><blockquote><em>A Massachusetts hospital chain led by a Cuban American heart surgeon with family ties to Miami has sent Jackson Health System a non-binding 'expression of interest' letter</em>, offering to take over the financially troubled public hospitals, invest $600 million in capital and assume $500 million in debt.<br /><br /><em>The $1.1 billion offer from Ralph de la Torre of Steward Health Care System</em> was delivered Tuesday morning to members of the capital committee of the Public Health Trust, Jackson’s governing body.</blockquote><br /><strong>Questions Appear Immediately</strong><br /><br />The proposed deal immediately raised questions and concerns. The very nature of the deal was unclear:<br /><blockquote>Trust member Ernesto de la Fe said he wasn’t sure if the company was proposing a straight-out sale, while other board members said they thought the offer envisioned 'a public-private' partnership.</blockquote><br />Also, in a <a href="http://www.miamiherald.com/2011/02/23/2082142/questions-raised-about-bid-to.html">follow-up story </a>by the same reporter, there were questions about the rapid time-table,<br /><blockquote>Jackson is in such difficult financial conditions – its executives warn it may run out of cash in July – that many leaders are willing to consider a sale, but they wondered whether the 90-day timetable set by Steward Health Care System is realistic and what the deal might mean for the 500,000 uninsured persons in Miami-Dade County.</blockquote>There were questions about the company which proposed to buy Jackson:<br /><blockquote>'We need to know a lot more about this company,' said Sal Barbera, an adjunct professor at Florida International University and a former hospital executive.<br /><br /><em>Steward has existed only since November, when Cerberus Capital Management finalized a $895 million deal to turn six Catholic hospitals into a for-profit entity</em>. Steward has since bought two other small hospitals. Altogether, the Steward system has 1,565 licensed beds. Jackson has 2,100. De la Torre has been a hospital executive for less than three years.<br /><br />That’s 'a very short track record,' said Mark Rogers, a Trust member and former chief executive of the Duke University Hospital.</blockquote><strong>Would the Mission be Upheld?</strong><br /><br />The issue of whether a private, for-profit company would respect the mission of a safety-net hospital came up quickly,<br /><blockquote>Alan Sager, a health policy professor at Boston University, said some Steward facilities are money losers in poor neighborhoods. <em>'Some of us had a lot of questions'</em> about the Cerberus take-over and how the investment company could squeeze returns for investment out of hospitals that were struggling as nonprofits.<br /><br /><em>'We asked repeatedly. We never received answers,'</em> Sager said.<br /><br />He said his fear is that patient care will be reduced to make profits. <em>'I think there should be concerns about preserving essential patient care in Dade County</em>' if Steward took over Jackson, he added.<br /><br /><em>'If the object is merely to cut costs to make money … then that is not the right approach for Jackson</em>,' said Rogers, the former Duke executive. 'Clearly some costs have to come out, but we have to invest in new programs to maintain the quality of medical care that Jackson has always provided.'</blockquote><br />One day later, John Dorschner again writing for the Miami Herald <a href="http://www.miamiherald.com/2011/02/24/2084167/one-of-the-biggest-private-investment.html">raised more questions </a>about why a large private equity company would want to buy a money-losing public hospital system? First he noted,<br /><blockquote>While the human face on the $1.1 billion bid to buy Jackson Health System is a Cuban-American heart surgeon with strong family ties to Miami, <em>a vast and powerful entity looms in the background: Cerberus Capital Management.</em><br /><br />The company, named for the mythological three-headed dog that guards the gates of Hades, is <em>one of the biggest private investment firms in the United States, and it is the owner of Steward Health Care</em>, the Boston hospital group that this week said it is interested in buying Miami-Dade’s public hospitals</blockquote><br />So,<br /><blockquote>The question that perplexes some Trust members is <em>why such a big-time investment firm would be interested in a healthcare system with three public hospitals that lost $244 million</em> in fiscal 2009, is expected to lose $105 million in fiscal 2010 and is projected to run out of cash in July unless drastic measures are taken.</blockquote><br />The concern, again, was whether Cerberus would uphold the current mission of the hospital system:<br /><blockquote>Trust Treasurer Marcos Lapciuc said Thursday that Cerberus is 'in the driver’s seat' on this deal, not Steward. 'They are going to expect some return on their investment. <em><strong>This is not going to be charitable donation</strong></em>,' he said.</blockquote><br />Of course, the <a href="http://www.jhsmiami.org/body.cfm?id=143">central mission </a>of the current Jackson Health System would seem to be charitable.<br /><blockquote>To build the health of the community by providing a single, high standard of quality care for the residents of Miami-Dade County</blockquote><br />The implication of "single, high standard" is that applies to all residents, regardless of financial status or ability to pay.<br /><br /><strong>More Questions</strong><br /><br /><u>The CEO's Short Term Focus</u><br /><br />There is good reason to question whether Steward Health Care, formerly Caritas Christi, and now owned by Cerberus Capital Management would uphold that mission. As we <a href="http://hcrenewal.blogspot.com/2011/02/new-steward-health-care-will-superbowl.html">noted recently</a>, the Steward Health Care CEO seems to have a very short-term focus, suggested by the track record of the Cerberus CEO, who quickly left an organization he had aggressively promoted, suddenly switched from the Republican party to become a big contributor to the Democratic party, abandoned his medical license after developing a good reputation as a cardiovascular surgeon, and famously was quoted, "<em><strong>burn the boats on the beach, baby</strong></em>." Would he support the long-term commitment needed to make both the Massachusetts based and now the proposed Florida based hospitals, most of which are safety net hospitals, succeed?<br /><br /><u>"Leakage Reduction" - a Threat to Physicians' Professionalism?</u><br /><br />As we also <a href="http://hcrenewal.blogspot.com/2011/02/new-steward-health-care-will-superbowl.html">noted recently</a>, the main tenet of his business plan seemed to be to reduce "leakage," to make sure patients who start within the system are referred within the system and do not "leak" elsewhere. The problem with this is that physicians are supposed to decide how to manage patients, and specifically to decide where to refer patients in the patients' interests, not just to keep money flowing to the health care system. "Leakage reduction" may possibly threaten physicians' first commandment, to make decisions to maximize benefits and minimize harms to individual patients, before all other considerations. Also, as we noted earlier, since Steward Health Care purchased not only some Massachusetts hospitals, but a big network of physician practices, there could be a risk that the physicians who are now employed by a private equity group would be pushed to make referral decisions for financial reasons, rather than in the best interests of the patients. <br /><br />Note that a <a href="http://www.healthecareers.com/physicians-surgeons-md-do/job/senior-medical-director/1171863">recent (posted 9 February, 2011) advertisement </a>for a Senior Medical Director (physician leader) of the Caritas Christi Network Services, the physician group owned by Steward Health Care LLC, said the Director's first goal would be:<br /><blockquote>This position will have a leadership role in all aspects of the CCNS system, including responsibility and accountability for:<br />- Lead/Mentor/Support IPA based Medical Directors (at both the IPA and Pod level) to achieve Medical Management goals and objectives in Quality, <em><strong>Leakage</strong></em>, Utilization, and Risk performance</blockquote><u>Keeping Company with Gun and Ammunition Manufacturers and "Mercenaries"</u><br /><br />There are also questions about whether the corporate culture of Cerberus Capital Management would be compatible with the management of safety-net hospitals. Cerberus has some current investments in firms whose operations seem oddly askew from providing medical care to patients regardless of their ability to pay.<br /><br />First, Cerberus owns the biggest manufacturer of firearms and ammunition in the US. As <a href="http://www.businessweek.com/magazine/content/10_33/b4191041673261.htm">reported</a> by BusinessWeek last year,<br /><blockquote>Cerberus had more than DPMS [Firearms] in its sights. From April 2006 to January 2008 it bought three other firearms companies: Bushmaster, Remington, and Marlin. And it kept adding to its collection. Cerberus now controls 13 brands in a holding company it created, Madison (N.C.)-based Freedom Group. <em>With sales of $848.7 million in 2009, Freedom Group is the largest gun and ammo maker in the U.S. That means Stephen A. Feinberg, Cerberus' founder and managing member, is the country's top civilian gun magnate</em>. </blockquote><br />In addition,<br /><blockquote>Luth, the rifle maker, says that when he arrived at Cerberus' Park Avenue offices to negotiate a deal in 2007, he discovered that <em>Feinberg and several of his partners 'are real gun guys.' </em></blockquote><br />Also, as <a href="http://dealbook.nytimes.com/2010/04/12/cerberus-to-buy-dyncorp-for-1-5-billion/">reported</a> by the New York Times, Cerberus recently bought one of the biggest "private military contractors,"<br /><blockquote><em>DynCorp International, the private military contractor, said on Monday it has agreed to sell itself to Cerberus Capital Management for $1.5 billion</em>, as the private equity industry continues to return to its core business of deal-making.<br /><br />Cerberus will pay $17.55 a share for DynCorp, a 49 percent premium to Friday’s closing price of $11.75. DynCorp now has 28 days under a 'go-shop' provision within the deal agreement to find a higher and better offer.<br /><br />While DynCorp has continued to win new contracts from the federal government, it has also been the subject of controversy over the years for its assignments in Iraq.</blockquote><br />That controversy was amplified in <a href="http://www.thenation.com/blog/mercenary-owners-they-are-changin-sort">an article </a>in The Nation by Jeremy Scahill, entitled "The Mercenary Owners, They Are a Changin' (Sort of)<br /><blockquote>Blackwater and <em>DynCorp, the two leading mercenary firms servicing the US wars in Iraq and Afghanistan</em> have both undertaken steps toward significant structural changes over the past month. In the case of DynCorp, the ownership of the whole business seems to be changing hands, while Blackwater is dumping its private air force.<br /><br />Cerberus Capital Management, one of the largest private equity firms in the US announced April 12 it was buying DynCorp, the massive, publicly traded company, which is akin to the Wal-Mart of the private security industry, for $1 billion in cash. Cerberus counts among its big wigs former vice president Dan Quayle, who often represents the company internationally. DynCorp has had its share of scandals over the years, including whistle blower <em>allegations that personnel have engaged in organized sex-slave trading with girls as young as 12</em> and <em>allegations its personnel have assaulted journalists</em>. It has been <em>rebuked by the State Department for its 'aggressive behavior' in interactions with European diplomats, NATO forces and journalists in Afghanistan</em>. A 2007 US government audit of DynCorp's work in Iraq found that the State Department 'does not know specifically what it received for most of the $1.2 billion in expenditures under its DynCorp contract for the Iraqi Police Training Program.' More recently, the company was in the news facing <em>allegations its training of the Afghan National Police was shoddy</em>, including allegations its trainees didn't know how to adjust the sights on their AK-47s. If the Cerberus deal goes through, it will mean that the publicly-traded DynCorp will go private, meaning that it will be infinitely more difficult to get information on the company.<br /><br />Cerberus seems to have had a dream of owning its own mercenary business for at least a few years. In April 2008, the company was reportedly looking to buy Blackwater. The deal apparently fell through because of concerns over Blackwater's reputation.</blockquote><strong>Summary</strong><br /><br />So we have come a long way from 1980, when the US American Medical Association gave up the rule that the practice of medicine should not be "commercialized, nor treated as a commodity in trade."  (See posts <a href="http://hcrenewal.blogspot.com/2007/12/relman-in-jama-on-threats-to-physicians.html">here </a>and <a href="http://hcrenewal.blogspot.com/2009/06/why-did-us-physicians-give-up-their.html">here</a>.)   Now we have private equity firms buying or trying to buy formerly non-profit safety net hospital systems to be included in portfolios that can include gun and ammunition manufacturers and private armies.  Now we have physician networks owned by private equity firms focused on choking off "leakage."  Such ownership may initially inject lots of money into the system, and may eventually profit the new private owners, but what will we give up in this brave new world of commercial safety-net hospitals and for-profit physician practices?<br /><br />As we said before,.... Deals that turn not-for-profit hospital systems into privately held for-profit systems ought to be scrutinized with extreme skepticism. Furthermore, once such deals are made, the results ought to be watched extremely closely to make sure they do not put private gain ahead of individuals' and the public's health. For-profit hospitals have generally not lived up to the promises they made to provide quality, accessible health care at a cheaper price.  It is yet to be seen whether private equity running for-profit hospital systems (and physicians networks) will do any better. <br /><br /><strong>Coda</strong><br /><br />The title requires apologies to Warren Zevon, who famously <a href="http://www.youtube.com/watch?v=S5puAN1PGQw">performed</a> "Send Lawyers, Guns and Money."<br /><br /><iframe title="YouTube video player" width="425" height="349" src="http://www.youtube.com/embed/S5puAN1PGQw?rel=0" frameborder="0" allowfullscreen></iframe>

Send Mercenaries, Guns, and Money? - Cerberus Tries to Buy Jackson Health

The latest twist in the tale of one of the US great safety-net public hospitals raises some interesting questions.  As reported by John Dorschner in the Miami Herald, Jackson Health System has had som…

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Electronic Medical Records and Going For Broke: Jackson Health System's Financial Future Appears Grim

<div style="text-align: justify;">I have written on numerous occasions that health IT in its present form, often poorly designed and implemented under current IT leadership structures, is often a waste of precious healthcare resources. The resources might be better spent on essentials such as patient care for the poor or improved human staffing, until this experimental technology is perfected.<br /><br />As at my site on <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/">health IT difficulties and mismanagement</a> I observed:<br /><blockquote><br /><span style="font-family:Arial;">Healthcare information technology (HIT) holds great promise towards improving healthcare quality, safety and costs. As we enter the second decade of the 21st century, however, this potential has been largely unrealized. A significant factor impeding HIT achievement has been <i style="">mismanagement of the technology</i>. Mismanagement of HIT is largely due to false assumptions and naïveté concerning the challenges presented by this still-experimental technology, and underestimations of the expertise essential to achieve the potential benefits of HIT. This results in mission-hostile HIT design, and HIT leaders and stakeholders operating outside (often far outside) the boundaries of their professional competencies. <span style="font-weight: bold;">Until these issues are acknowledged and corrected, HIT efforts will waste precious healthcare resources, will not achieve claimed benefits for many years to come</span>, and may actually <b>cause harm</b>. Numerous reports in the <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=2009">2009 articles link</a> corroborate this view, including those from the U.S. Joint Commission and National Research Council.<span style=""> </span></span></blockquote><br />The following may bring my observations to life.<br /><br />This from 2007:<br /><br /><blockquote>RedOrbit.com/News<br /><span style="font-size:100%;"><a href="https://exchangeweb.drexel.edu/owa/redir.aspx?C=228e92552e6e49c0bb70ebaa5010067a&URL=http%3a%2f%2fwww.redorbit.com%2fnews%2fhealth%2f1057193%2fjackson_memorial_hospital_uses_stateoftheart_technology_to_drive_improved_patient%2findex.html">Jackson Memorial Hospital Uses State-of-the-Art Technology to Drive Improved Patient Outcomes for South Florida Families</a></span> <p>Posted on: Thursday, 6 September 2007, 09:11 EDT</p><p>Jackson Memorial Hospital (JMH), part of Jackson Memorial Health System, South Florida's leading/largest healthcare provider, recently implemented 11 Cerner Millennium® solutions. <span style="font-style: italic; font-weight: bold; color: rgb(255, 0, 0);"><br /></span></p><p><span style="font-style: italic; font-weight: bold; color: rgb(255, 0, 0);">[Including EMR, nursing, pharmacy, radiology, HIM, Eligibility Management, Master Person Index, Registration Management, Scheduling Management, Emergency Department, etc. - ed.] </span><br /></p><p>This marks the hospital's <span style="font-weight: bold;">first step</span> in a multi-stage healthcare information technology implementation. With Cerner Millennium® solutions, JMH clinicians now have access to real-time resources to better manage patient care with improved access to cross-department information, evidence-based clinical decision support and <span style="font-weight: bold;">streamlined hospitals operations. </span></p><p>"Cerner is pleased to partner with Jackson Memorial Hospital, an institution continually ranked as one of the best hospitals in America," said Trace Devanny, Cerner -- president. "JMH's decision to implement a solution-oriented information technology system reinforces its vision to improve healthcare communitywide. Cerner worked together with JMH to implement multiple Cerner Millennium solutions specifically designed for various roles, venues and conditions that will ultimately improve the patient experience."</p></blockquote></div><div style="text-align: justify;"><br />These implementations, a mere "<span style="font-weight: bold;">first step</span>" towards "streamlining operations," and their maintenance, modification, remediation, and staffing were undoubtedly multimillion-dollar expenses and are likely still ongoing. (See other examples of mass hospital IT expenditures <a href="http://hcrenewal.blogspot.com/2006/10/70-million-for-electronic-medical.html">here</a> and <a href="http://sacramento.bizjournals.com/sacramento/stories/2006/03/06/story3.html">here</a>.)<br /><br />Now, fast forward to 2010. This is stunning:<br /><blockquote><span style="font-size:100%;"><br /><a href="http://www.miamiherald.com/business/breaking-news/story/1422477.html">Jackson Health System's financial future appears grim</a></span><br />Miami Herald<br />BY JOHN DORSCHNER<br />Posted on Wednesday, 01.13.10<!-- end /production/story/credit_line_format.comp --><br /><br /><span style="font-weight: bold;">Looking forward and back, Jackson Health System's grim financial picture just keeps getting worse.</span><br /><br />Members of the Public Health Trust, the system's governing board, are being told:<span class="bullet"><br /><br />•</span> Patient volume has dropped by 6.5 percent recently, meaning that with all the cost cutting and new revenue plans, <span style="font-weight: bold;">Jackson is facing an $88 million loss this fiscal year</span>, and this estimate is likely to get worse.<br /><br /><span class="bullet">•</span> The government system may have lost much more money last year than the $56 million it reported in unaudited statements. <span style="font-weight: bold;">That loss could conceivably go as high as $150 million.</span><span class="bullet"><br /><br />•</span> Cash on hand to pay bills -- the measure of how the three-hospital system is doing at this moment -- continues to be awful. ``<span style="font-weight: bold;">Perhaps a cash hemorrhage,'' PHT member Marcos Lapciuc called it.</span><br /><br />The bad news came at PHT committee hearings late Tuesday afternoon. ``Very drastic measures need to happen'' to stem the growing losses, said Chief Executive Eneida Roldan. She said the losses were likely to increase, because considerable funding for poor patients comes from Tallahassee, and the Legislature is expected to cut back on healthcare funding programs as it deals with its own budget crisis.<br /><br />``We're making very drastic decisions that no hospital wants to do,'' Roldan told the board, <span style="font-weight: bold;">including ending contracts for 175 unfunded patients to receive dialysis at out-patient centers</span>.</blockquote><span style="font-weight: bold; font-style: italic; color: rgb(255, 0, 0);"><br /></span><span style="color: rgb(0, 0, 0);">Ending contracts for unfunded patients to receive dialysis after spending tens of millions of dollars on IT to "streamline operations?" Could this be an example of "Blood for Computers?" </span><br /><br /><blockquote>Board members were upset in particular about how the institution, with 12,000 employees and $1.9 billion in revenue, could be so uncertain about its financial performance last year.<br /><br />The central issue appears to be the <span style="font-weight: bold;">proper amount of accounts receivable</span> -- money that the system expects to collect from insurers -- as contrasted with bad debts that are unlikely to be collected. As of Nov. 30, Jackson was listing its accounts receivable at $431.8 million.<br /><br />``It just doesn't tie in,'' said board member Martin Zilber. ``We talk about $400 million or $500 million like it's buying lunch.''<br /><br />Ernst & Young, Jackson's auditors, are expected to present the official audited returns within the next month. ``We know there's going to be a sizable adjustment,'' Chief Financial Officer Frank Barrett told the board. <span style="font-weight: bold;">But he's uncertain how much.</span></blockquote><span style="font-weight: bold;"><span style="font-style: italic;"><br /></span></span>Uncertain how much money will be "adjusted" in accounts receivable? Apparently all this computerization has not realized a ROI on basic financial management.<br /><br />Could problems with the IT (e.g., mismanaged design, mission hostile user experience, bugs, etc.) and/or mismanagement of its implementation actually be <span style="font-weight: bold;">responsible</span> for the chaos, I ask?<br /><br /><blockquote>... Perplexed board members heard several explanations. One is that the system has <span style="font-weight: bold;">switched computer systems, and the old financial software may have been calculating bills as accounts receivable from years ago, when those items should be listed as uncollectable bad debts.</span></blockquote><br />If that was the case (and I note the "may have", implying the organization is not even certain of this explanation), why was this discrepancy not noted before or during the transition? Who, exactly, was managing this project? This would be a stunning example of IT mismanagement making what happened at <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/failurecases/?loc=cases&sloc=Insufficient%20IT%20management">Yale some years ago</a> look like a cakewalk, and on par with the mismanagement at another Miami hospital, Mt. Sinai, as I posted <a href="http://hcrenewal.blogspot.com/2008/04/pearls-before-swine-hospital-gets-f-on.html">here</a>.<br /><br /><blockquote>... On Monday, the board was shown a presentation on bill collecting with a complex grid of flow charts and time lines. Still, some board members expressed concern <span style="font-weight: bold;">about why Jackson's financial people didn't have a better handle on key measures of the system's condition<span style="font-style: italic;">.</span></span></blockquote><span style="font-weight: bold; font-style: italic; color: rgb(255, 0, 0);"><br /></span>A question arises regarding whether the massive IT implementations are causing data irregularities, confusion, or are not functioning properly in other ways affecting financial management.<span style="font-weight: bold;"><br /><br /></span><blockquote>``I don't totally understand the reasons,'' said [board member] Ernsto de la Fé.<span style="font-weight: bold;"><br /><br />... </span>The fiscal 2009-2010 budget had calculated a loss of $6.5 million. Of that, $107 million was the baseline loss, reduced by $59.8 million in new revenue building ventures and $41.5 million in <span style="font-weight: bold;">cost-cutting.</span></blockquote><span style="font-weight: bold;"><br /></span>"Cost cutting" usually is synonymous with "layoffs." How many millions were spent on computing instead of jobs, I wonder? <span style="font-weight: bold;"><br /></span><br />Additional information on these financial difficulties are available at the Miami Herald:<br /><blockquote><br /><div id="mlt_item">•<a href="http://www.miamiherald.com/living/health/costs/story/1423837.html?storylink=mirelated" alt="Jackson Health System faces more financial losses" tooltipid="mi_tt1"> Jackson Health System faces more financial losses</a></div> <div id="mi_tt1" style="display: none;"><h4>Jackson Health System faces more financial losses</h4> <p> Looking forward and back, Jackson Health System's grim financial picture just keeps getting worse.</p><p> Members of the Public Health Trust, the system's governing board, are being told:</p><p> Patient volume has dropped by 6.5 percent recently, meaning that with all the cost cutting and new revenue plans, Jackson is facing an $88 million loss this fiscal year. This estimate is likely to get worse.</p></div> <div id="mlt_item">•<a href="http://www.miamiherald.com/living/health/costs/story/1327064.html?storylink=mirelated" alt="Donna Shalala tries to mend fences with Jackson Health" tooltipid="mi_tt2">Donna Shalala tries to mend fences with Jackson Health</a></div> <div id="mi_tt2" style="display: none;"><h4>Donna Shalala tries to mend fences with Jackson Health</h4> <p> While Jackson Health System's governing body struggled Tuesday to find more ways to cut costs and increase revenue, University of Miami President Donna Shalala made a rare appearance before the Public Health Trust to ``personally apologize for statements by members of the university leadership team last week.''</p><p> She was referring to UM Board of Trustees Chairman Phillip George's comments to Jackson leaders that he was disturbed about the quality of doctors that Jackson had been hiring in recent years. ``I wouldn't send my family to many of them,'' George said.</p><p> Shalala noted that the Jackson doctors, all fully credentialed, were often approved by UM department heads to practice at Jackson. ``If they are good enough for Jackson patients, let me tell you, they are good enough for me and my family.''</p></div> <div id="mlt_item">•<a href="http://www.miamiherald.com/living/health/healthcare-reform/story/1237386.html?storylink=mirelated" alt="Jackson Health System may close clinics, nursing homes" tooltipid="mi_tt3">Jackson Health System may close clinics, nursing homes</a></div> <div id="mi_tt3" style="display: none;"><h4>Jackson Health System may close clinics, nursing homes</h4> <p> Needing to present a balanced budget for Miami-Dade Commission's approval Thursday, the Jackson Health System is proposing to close two primary care centers, both of its nursing homes, outsource inmate healthcare and reduce support to other entities that care for the poor and uninsured.</p><p> ``We are in an extremely unique position,'' Chief Executive Eneida Roldan said Wednesday. The public health system is having to cut services to meet an estimated budget deficit of $133 million for its next fiscal year at a time when the commission must also deal with filling a shortfall of more than $400 million in other county programs.</p><p> Some doctor services at Jackson Memorial may also be curtailed, Roldan said. ``Because Jackson has been forced to reduce its funding for the annual operating agreement with the University of Miami,'' she wrote in a message to employees, ``the university is also planning to reduce its services offered at our facilities.''</p></div> <div id="mlt_item">•<a href="http://www.miamiherald.com/1374/story/1402578.html?storylink=mirelated" alt="Jackson Health System's cash pot falls to dangerous levels" tooltipid="mi_tt4">Jackson Health System's cash pot falls to dangerous levels</a></div> <div id="mi_tt4" style="display: none;"><h4>Jackson Health System's cash pot falls to dangerous levels</h4> <p> Even after plans to reduce staff and close units, Jackson Health System is getting dangerously close to its bare minimum for cash-on-hand -- a key indication of financial health.</p><p> As of Oct. 31, Miami-Dade's public hospital system had 20.8 days of cash to pay its bills, including payroll and keeping the lights on. Its governing body, the Public Health Trust, has set 20 days as the lowest Jackson should go.</p><p> ``When it gets below 20 days, that's when I declare an emergency,'' said Frank Barrett, chief financial officer. He said he is already talking to county administrators about getting an advance to fund payroll if the system runs out of cash.</p></div> <div id="mlt_item">•<a href="http://www.miamiherald.com/business/breaking-news/story/1402083.html?storylink=mirelated" alt="Jackson Health's finances continue to deteriorate" tooltipid="mi_tt5">Jackson Health's finances continue to deteriorate</a></div></blockquote></div><div style="text-align: justify;"><br />While IT is not a definite cause or contributor to these problems, I sense familiar patterns. Perhaps forensics related to hospital computing, the decisions to spend so many millions on the technology, and the actual impact of the implementations might shed additional light on the reasons for this apparent financial debacle.<br /><br />Perhaps the hospital system would have better spent that money on buttressing its financial stability, and hiring smart people to have kept better track of its finances.<br /><br />An analysis of these issues might likely provide a cautionary tale for hospital executives planning on massive new HIT expenditures to "streamline operations."<br /><br /><span style="font-weight: bold;">Addendum: </span><br /><br />This is a good time to once again call attention to this paper by a perspicacious author from Down Under:<br /><br /><b style=""><span style=";font-family:Arial;font-size:10pt;" ></span></b><blockquote><b style=""><span style=";font-family:Arial;font-size:10pt;" ><span style="font-size:100%;">Pessimism, Computer </span><span style="font-size:100%;">Failure, and Information Systems Development in the Public Sector.</span></span></b><span style=";font-family:Arial;font-size:100%;" ><span style=""> </span>(Public Administration Review 67<span class="GramE">;5:917</span>-929, Sept/Oct. 2007, Shaun Goldfinch, <st1:place st="on"><st1:city st="on">University of Otago</st1:city>, <st1:country-region st="on">New Zealand</st1:country-region></st1:place>).<span style=""> </span>Cautionary article on IT that should be read by every healthcare executive documenting the widespread nature of IT difficulties and failure, the lack of attention to the issues responsible, and recommending much more critical attitudes towards IT.<span style=""> </span><a href="http://www.ischool.drexel.edu/faculty/ssilverstein/Goldfinch_pessimism_PAR.pdf">link</a> to pdf</span></blockquote><br />Feb. 11, 2010 Addendum:<br /><span style="font-weight: bold;"><br /></span><a href="http://www.healthcarefinancenews.com/news/cfo-miami-health-system-resigns"></a><blockquote><a href="http://www.healthcarefinancenews.com/news/cfo-miami-health-system-resigns">CFO at Miami health system resigns</a><br /><p>MIAMI – Frank Barrett, chief financial officer and executive vice president at Miami's Jackson Health System, has resigned after five years in the position. The health system's board of directors criticized Barrett strongly last week after he reported miscalculated financial losses. Barrett had revealed to the board that Jackson Health lost $203.8 million in fiscal 2009, although he had originally reported a $46.8 million loss. The projected loss for fiscal 2010 rose $87 million to $229 million.</p></blockquote><p></p><br />-- SS<br /></div>

Electronic Medical Records and Going For Broke: Jackson Health System's Financial Future Appears Grim

I have written on numerous occasions that health IT in its present form, often poorly designed and implemented under current IT leadership structures, is often a waste of precious healthcare resource…

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