Jackson Health System in Miami stunned its governing board with the announcement that the public hospital system's loss for fiscal year (FY) 2009 ended Sept. 30 was $203.8 million--roughly four times the original estimate of $46.8 million, reports the Miami Herald. In addition, the projected loss for FY 2010 has almost tripled within the space of a month. Originally set at $87 million, the system now anticipates an FY 2010 loss of $229 million (a baseline loss of $291 million reduced by $48 million in new revenue and $13.6 million in accounting adjustments). Jackson is currently losing $14 million per month and will be broke in seven months under its current structure.
The health system reduced FY 2009 revenue, primarily accounts receivable, by $157 million on the heels of an audit, determining that these accounts receivable amounted to bad debt. Jackson thought it was collecting 29.6 percent of every gross dollar of charges in FY 2009, but in reality collected only 25.9 percent. Hospital officials attributed the deficit to more uninsured patients and an increase in unfunded patient days at flagship Jackson Memorial Hospital: 21 percent in FY 2009 vs. 15.35 percent in FY 2008.
To ensure the system has a better handle on its financial picture, Jackson is switching from an accrual accounting system (using the previous year's collection rates) to a cash system (based on incoming cash), says Chief Financial Officer Frank Barrett.
For more information:
- read this Herald article