Jackson CEO Proposes $200M in Salary Cuts

Proposed salary and benefit cuts' outrageous': union rep

The financially-strapped Jackson Health System's new CEO is asking the 11,000 union employees to take $200 million in cuts to their salaries and benefits to help close a $300 million deficit for the 2012 fiscal year that begins in October.

And they're not exactly thrilled about it.

"That's a threat, 'comply with my great idea where you give up $213 million and guess what, I won't lay you off,'" said Martha Baker, president of SEIU 1991, the local union that represents nurses and health care providers.

Baker says nurses will be forced out, especially after conceding to an 8 percent reduction in pay last year.

"We just think these cuts are outrageous and the caregivers are working already at 2007 wages," Baker said Wednesday.

But Jackson CEO Carlos Migoya, who's been on the job a month, says they're necessary, at least for now. Especially if he wants to avoid proposing mass layoffs, which he promised he wouldn't do.

"All we're asking for is a temporary adjustment or sacrifice and then as the hospital turns around and starts making a profit, we'll be able to give some back to the employees as well," Migoya said, adding that the key is cutting labor costs. "60 percent of our expenses are compensation."

The former veteran banker is preparing to submit his preliminary budget to the county that has Jackson losing $66 million, an improvement from the projected loss.
 
Migoya says the focus needs to be on implementing growth initiatives, including creating primary care centers to prevent patients from getting treatment from the costly emergency rooms.

He says that's the next step after balancing budget.

"We're looking to implement primary care centers throughout the community and that's part of our strategy," Migoya said. "Now, as we do that and you implement those things, first of all there's a cost to it, but those things are long-term."

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