City sounds alarms on cash-strapped Florida hospital

The city of Jacksonville, Fla., is reevaluating its agreement with UF Health Jacksonville after the hospital lost a significant amount of money in the last fiscal year. 

Currently, the city owns the facility and rents it to the Gainesville-based University of Florida Health. In exchange, the health system provides charity care for the county's residents and receives annual funding to partially offset the care costs. 

According to a Jan. 10 report from Jacksonville's Council Auditor's Office, the hospital's net position decreased by $53.6 million between June 30, 2022, and June 30, 2023. As a result, the hospital was not in compliance with the debt service coverage ratio, which is a comparison of annual income to annual debt payment and is used as an indicator of an entity’s ability to make future debt payments. If the requirement is not met for two consecutive years, it could be an event of default under the borrowing agreement. 

The hospital has taken steps to address the noncompliance, including hiring an independent consultant. The report states that "while there continue to be significant stresses expected on Shands Jacksonville's financial position…it is not anticipated that Shands Jacksonville will perform as negatively in [fiscal year] 2023/24 as it did in [fiscal year] 2023/23." 

However, the two parties' agreement expires in March 2028, making this time as good as any to reconsider the terms. During both the last fiscal year and the present one, the city has provided a combined $40 million from the general fund and the American Rescue Plan. But the money is still not enough, given the impending end of Rescue Plan funds and the frequency of visits from indigent patients, particularly those from the nearby jail. 

"Close to 5% of our emergency department visits are from [the] inmate population," UF Health Jacksonville CEO Patrick Green told News4Jax

Duval County, Fla., is the only county in Florida that can not levy a surtax to help cover indigent healthcare costs or fund a county hospital. The report considers multiple potential solutions, including an amendment to create a surtax.

In a statement shared with Becker's, a UF Health spokesperson thanked the city for the report and for providing consistent funding, along with additional money for care and infrastructure improvements. 

"The analysis the City of Jacksonville released today reflects a reality common to many safety-net hospitals across the country, including UF Health Jacksonville," the spokesperson said. "As discussed during today’s City Council meeting, the skyrocketing costs of providing healthcare like ours also means we need to find additional funding moving forward. Several city officials today expressed their appreciation for the dedication of our staff, and for the compassionate, expert care they provide. We look forward to working hand-in-hand with local officials to continue that mission."

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