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Jacksonville transition budget meeting: UF Health/Shands

The fourth day of Jackssonville’s Chief Administrative Officer Sam Mousas departmental budget reviews for the Lenny Curry mayoral transition begins with UF Health with Russ Armistead. As with the previous three days, we are blogging the vast majority of these meetings.

8:42 a.m.: Marty Fiorentino is sitting in for the first time. Armistead congratulating Mousa on accepting the appointment to the “thankless job” of Chief Administrative Officer.

8:43 a.m.: Armistead says the hospital is still technically Shands, and the name change is a “branding issue,” related to affiliation with UF Health. About 20 percent of the budget goes through Tallahassee, which he describes as a “struggle.” There have been issues for two of the last three years with state budgets. One year, revenue would have been driven, in part, via diagnosis. Another year: issue was a tiering system. Both of those would have been $30M+ issues. This past year, Armistead became “more of a spokesperson” on the Lower Income Pool issue. “That’s the context that I wanted to set,” as LIP is about 20 percent of the revenue, and “the federal government is going to squeeze Florida,” which means $400M will have to come from somewhere: there is a match, so $200M will be state money. “We will have a problem … every year until our model is slightly different.”

8:47 a.m.: Health care has moved from a “fee for service” world, away from the “traditional medicine” to much more of a managed care model. “What we’re dealing with is Medicaid and the uninsured. We are the home for the uninsured in Jacksonville. That is the structural issue.”

8:49 a.m.: Discussion of Florida’s uninsured: 3.8M of 15M. Duval has a 19 percent uninsured rate: 145K people. With the Exchange, the number may have dropped to 135K. About 10 percent of the uninsured are covered by the city contract, but 100 percent of them believe Shands is their hospital. Most of the uninsured are working poor.

8:51 a.m.: “This hospital is owned by the city. The towers and the pavilion are not owned by the city.” Armistead offers to sell the buildings to the city; Mousa declines that offer.

8:52 a.m.: “This is your hospital. We took it over because it wasn’t working.”

8:53 a.m.: There is a lease on the property through 2067. The indigent care agreement renews yearly, including prisoners who need care and examination. It is a money loser.

8:54 a.m.: The average of Medicaid and uninsured among all 14 hospitals in Jax: 25 percent. Shands is 51 percent. The ER is like a car lot where the keys are in the car and people drive off without paying. There are patients who need long term care who are laid up at Shands because of no resources. “We have a crappy system, but that’s what we’re dealing with,” says Armistead.

8:57 a.m.: “This is the kicker. The commercial HMO and PPO… we are less than 10 percent compared to the other hospitals.”

8:59 a.m.: Single adults who are lower middle class fall through the cracks. “Florida’s eligibility for Medicaid is incredibly low,” says Armistead.

9:00 a.m.: “If we had 25 percent commercial business, I wouldn’t have the crisis that I have each year. Other hospitals… don’t treat the volume of uninsured.” Shands is “like the magnet,” and that is the “structural issue” that requires more funds. “We are only responsible for the city contract. Everyone else can go to any other hospital in the city and get the same treatment.”

9:02 a.m.: The ER is busy. The reduction in state funds, $25-26M a year, created a “Medicaid and uninsured issue.”

9:03 a.m.: The city contribution over the last decade is a “cumulative loss.” They lost about $34M on the city contract for the last year.

9:04 a.m.: Any patient who shows up gets treated in the ER. There is a process of trying to get patients in a program that provides reimbursement, for Duval patients. If they are poor and in Duval, they get charged to the city contract. If not, there is a loss accrued.

9:05 a.m.: “There is no difference in the treatment,” says Armistead. Mousa has questions about who falls under the city contract. The city contract covers people below the poverty line fully. For people above the poverty line, they may be asked to pay up to 80 percent of the bill, which is prohibitive for them. Income excess or homelessness can disqualify. Some patients will not do the paperwork.

9:07 a.m.: Mousa is trying to get a handle on the “accuracy” of this reckoning to establish the loss. Worried about padding the number. The hospital does everything they can, goes the reply, to derive an income stream.

9:09 a.m.: “If you qualify for the city contract,” and it is determined there is another illness, such as cancer, referrals are made to the appropriate doctors. “The ugly part of medicine… is they get acute care in the ER… but they won’t be treated for the” long term illness. They will see the person in a more advanced stage later on, “but then it’s too late.”

9:11 a.m.: An independent Dixon-Hughes study is being presented comparing Shands to other safety-net hospitals in the US. Shands is pretty poor, without great liquidity, and with an unfavorable margin. The patient mix is “high Medicaid.” This is a revenue issue.

9:13 a.m.: “We’re the third highest Medicaid cost provider in the state.” Not a “place to be.”

9:14 a.m.: Jackson Memorial gets 46 percent of Medicaid costs from its city; Shands gets 10 percent. Underfunded locally.

9:15 a.m.: If Shands got what Jackson did, there would be a $97M increase.

9:16 a.m.: Discussion of Shands’ role as a city employer and a training hospital. Level 1 Trauma Center and one of three Poison Control centers in the state.

9:16 a.m.: “We’re probably going to make $3-4M this year, but we’re on the razor’s edge.”

9:17 a.m.: The billion from the Feds this year will drop to $600M next year. “This year’s been the most difficult” for Armistead. “I felt like we got singled out” to testify to the Senate. “It’s very disconcerting” to employees, who value job security.

9:18 a.m.: The new facility in the north of Jacksonville is for the future. The building is a “lease purchase.” The property belongs to Shands. This facility extends health care coverage to the Northside; most hospitals are south of the river. There is “more of a normal payer mix” on the Northside too, which is their “attempt to get our finances” more in line with other area hospitals. 92 bed capacity; will take two years to get built. Financing an issue, as Moody’s keeps dropping the credit rating.

9:21 a.m.: Virtually all other public hospitals in the state have a dedicated local funding source. Shands is the “anomaly,” a “magnet” for indigent care. In other places, the care is “absorbed” by profit in insured health care.

9:23 a.m.: Solutions: increase local support; a one-time cash infusion. Mousa doesn’t know why Shands bought the physical facility in the first place.

9:25 a.m.: Tens of millions of dollars of renovations and capital improvements are needed. The money is not there.

9:26 a.m.: Another solution: dedicated support. The city charter blocks a sales tax. Still another solution: support from other hospitals.

9:27 a.m.: “I don’t like being the poster child for ‘woe is us’, but that’s the model.”

9:28 a.m.: Mousa with the “definition of insanity” quote. Wants to know what they’ve done to “revamp,” to “think differently.”

9:29 a.m.: “The first thing that comes to my mind… what are you doing different to minimize” the adversity, asks Mousa.

9:30 a.m.: From a platform operationally, says Armistead, there’s nowhere to go without “dramatically impacting the services” they provide. The North facility is supposed to be a profit driver. “If we continue to overcharge commercial, that strategy will work” in a decade. Armistead could take the residency and trauma center out, downsize the bed, and “literally force people” to wait in the ER or go elsewhere. Radiology cannot go out. “Unfortunately, you start talking about draconian changes the community wouldn’t like… we’ve met the needs of the community with a band aid… we’ve went three years without salary increases. We’re starting to lose staff,” even the “mission-driven” diehards. With trauma, jail, and homeless patients, the “ER is a difficult place to work.”

9:32 a.m.: Mousa believes these options need to be considered.

9:34 a.m.: Blue Cross says the city needs to go self-insured. That won’t fix Shands in the short-term, but in the long run, it will help. In the old days, the residents would treat everything. Now, there are limitations. They also are dealing with patients from other hospitals who are sent to UF Health.

9:36 a.m.: Armistead wonders if he should be “meaner in the ER.” Right now, they can’t handle commercial patients because of the non-paying clog in the system. They are trying to be “more like other providers.”

9:37 a.m.: They are looking for a legislative resolution, also, to allow Duval County to impose a health care tax. Armistead believes this is consistent with what happens elsewhere in Florida. In Dade, there is a half-penny sales tax, and Jackson is in the county budget, getting a percentage thereof. There also was a Capital Improvement bond issue of $830M that made Jackson even healthier.

9:40 a.m.: “One solution suggested to me,” says Armistead, “is just close.”

9:41 a.m.: “You’d have national news… trauma would be diverted [downstate]… three hour EMS calls, and your response time would probably triple… you’d have a bloody mess,” Armistead continues.

9:43 a.m.: Obamacare has slightly depressed the numbers of uninsured. A lot of people can’t afford the insurance without a subsidy, though.

9:43 a.m.: Mike Weinstein mentions that the deductibles are an impact for patients.

9:43 a.m.: Mousa discussing the “overcharge” as a way of covering losses. He doesn’t like the term.

Written By

A.G. Gancarski has been a correspondent for FloridaPolitics.com since 2014. In 2018, he was a finalist for an Association of Alternative Newsweeklies "best political column." He can be reached at AG@FloridaPolitics.com

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