Miami-Dade Hospital in "Death Spiral"; County on the Hook for Union Salaries

Inquiring minds are reading Miami-Dade hospital system nears insolvency.

The major hospital network Miami relies on for trauma care is close to insolvency and could be cut off by suppliers. Executives for Jackson Health System surprised its governing board Tuesday by saying the nonprofit is near or already in a "death spiral" as it runs low on cash.

Chief Operating Officer David Small says any day he could hear from a surgeon without enough supplies to operate. The hospital system is the only Level 1 trauma center set up to provide emergency care around the clock in Miami-Dade, which is Florida's most populous county and the 8th largest in the nation.

The hospital system needs a $67 million advance from the county to avoid coming within a day and a half of operating cash by April 5.

County responsible for paying Jackson's union workers

Here's an interesting highlight. The Miami-Dade attorney says County responsible for paying Jackson's union workers.

If the Jackson Health System runs out of cash, the county would be responsible for paying Jackson's 10,500 union workers, but not necessarily the other 1,500 employees, according to a legal analysis by County Attorney R.A. Cuevas Jr.

It's unclear exactly how big a tab that might be, but it would be a huge chunk of the $86 million of salaries and benefits that the public hospital system spends each month. At present, Jackson is expected to run out of cash in May or June unless drastic cuts are made.

This revelation on the county's responsibility comes just before a special meeting scheduled for Wednesday by the Miami-Dade County Commission ``to really understand the issues . . . being faced by the community's safety net hospital,'' according to the memo from Chairman Dennis C. Moss, who ordered the meeting.

Cuevas' memo explores many issues in the relationship between Jackson and the county and raises the possibility that Gov. Charlie Crist might set up an oversight panel to administer the financially troubled institution, much the same way that Gov. Lawton Chiles created a financial emergencies board in 1996 to get the city of Miami back on track.

Jackson Chief Executive Eneida Roldan is trying to find ways to get faster and lower costs, but last week she announced she was putting a 45-day moratorium on job cuts, meaning it would likely be May before any major cost-cutting takes place.

The county meanwhile is battling its own budget woes, needing to find another $48 million in cuts this fiscal year, making it extremely difficult to find more money for Jackson.

Cascading Bankruptcies

Read the last sentence in the above article above again. It highlights the problems of unions dumping on cities dumping on counties. The only solution is to get rid of unions, taxpayer supported defined benefit pension plans, and taxpayers supported salaries well above what the private sector makes.

As I said years ago, I fully expect several counties in Florida to go bankrupt. Moreover, I expect many cities in many states to do the same. The only way out is for unions to voluntarily agree to dramatic cuts in wages and benefits. However, as noted in Moorestown New Jersey Unions Highlight Union Arrogance, the odds of that happening in mass are slim.

Ironically, this depression is bound to unwind the devastatingly parasitic measures FDR used to combat the last depression.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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