Property tax cut could cost Miami’s public hospital $64M. What it means for care

Jackson Health, Miami-Dade’s public hospital system, is projected to lose millions of dollars in funding that it relies on to help provide patient care if Amendment 3, the property tax cut proposal, is approved in November.

If Florida voters agree to slash property taxes, the health system will have to figure out a way to operate with $64 million less within two years, according to Jackson Health CEO David Zambrana. He was one of four panelists who spoke during an Amendment 3-focused panel held Wednesday at Jungle Island by the Greater Miami Chamber of Commerce.

Amendment 3 is touted as a big tax break for Florida property owners and would increase the property tax exemption from $50,000 to $250,000 on primary homes by 2028. But local government officials are warning that the proposal, if approved, would leave cities and counties with less money to pay for essential services, including fire-rescue, mosquito control, buses, parks and public hospitals like Jackson. At least 60% of voters would need to approve the amendment for it to become law.

READ MORE: How does Miami-Dade spend a dollar of your property taxes? We did the math

Thursday’s panel, the first of several town halls the chamber plans to host in the county, was held to “explain the potential impact of this amendment and what difficult funding decisions may have to be made should it pass,” said P.J. Campbell, the chamber’s vice president of governmental affairs.

“The strength of our economy is directly tied to the strength of our infrastructure, public safety, healthcare and other essential services,” he said, noting that the Chamber is not advocating on how people should vote, but rather seeking to educate Miami’s business and nonprofit community to help them be informed ahead of November’s ballot.

Will property tax cuts affect patient care in Miami?

Zambrana, in response to the Miami Herald’s questions at the panel, said it’s too soon to know whether the amendment, if approved, would lead to service cuts, rollbacks or staff layoffs at the taxpayer-funded health system. Jackson is trying to figure out a game plan, he said.

“We would want to, I’m going to say, differentiate across all of our services that are potentially affected” to try and spread out the cuts to avoid one service area taking the brunt, he said.

What is clear is that if Amendment 3 passes, the growing safety-net health system — which already operates on a low margin — will have to figure out a way to continue its mission of providing care to everyone, regardless of their insurance status or ability to pay, according to Zambrana.

“I would never want our residents to be afraid that they’re not going to get the right care because Amendment 3 is passed,” Zambrana told the Herald after the panel. “On the contrary, our commitment is that the quality of care and the service they get at Jackson will not change. How we figure that out and how we mitigate that is still to be determined.”

The health system has seven hospitals, two nursing homes, a renowned transplant center, and several urgent cares, doctors’ offices and clinics across Miami-Dade, with more than 15,000 full-time employees. It serves as a teaching hospital through a partnership with the University of Miami Miller School of Medicine and recently opened one of the largest emergency rooms in the nation. Its fundraising arm, the Jackson Health Foundation, helps raise money to pay for patients who can’t afford treatment and to support major capital projects.

How will Amendment 3 affect Jackson Health System?

Property taxes help fund services across the health system, Zambrana said. The CEO said that includes emergency care at Ryder Trauma Center, organ transplantation, and costly but essential services that don’t bring the health system a lot of money, like behavioral health and labor and delivery services.

The health system, in a handout provided to attendees, said that slashing property taxes would force the health system to “examine virtually every area of its operations” for potential cost-cutting, including programs, services and staffing, as well as expansion and improvement projects.

If Amendment 3 passes, Jackson expects to see a “significant reduction in property-tax-supported funding” to the tune of $34.7 million in fiscal year 2027, about $29 million in fiscal year 2028 and about $64 million annually thereafter, according to the document.

Will property tax cuts affect other Florida hospitals? What about in Broward and Palm Beach counties?

The Florida Policy Institute estimates Florida’s public-hospital districts and health systems could lose $323 million over the next three years if the tax cut is approved. The taxpayer-funded public hospitals care for everyone, regardless of their ability to pay or insurance status.

The institute, in a recently released report, estimates that Broward Health, the public health system that primarily serves northern Broward, could lose more than $100 million over the next three years. Memorial Healthcare System, the public health system that cares primarily for southern Broward, is projected to lose about $2.2 million.

The Health Care District of Palm Beach County is expected to lose $66.5 million.

What is Jackson’s plan?

“A $64 million reduction would require us to look at, how do we make that up?” Zambrana said in the panel, noting that it’ll be hard to reel back costs because the health system already underwent extensive and recent cost-cutting efforts that shaved $350 million off its bills.

Jackson, one of the largest public health systems in the nation, cares for thousands of patients a year and generally generates about $3.1 billion in operating expenses, as the Herald has previously reported.

The health system has previously told the Herald that its net income — total profit after expenses, taxes and other deductions — varies year over year, ranging “from $7.9M to $41.4M last year — reflecting the volatility inherent in operating Jackson, which is subject to funding fluctuations, Medicaid policy changes, and extraordinary capital demands.”

The potential property tax cut comes at a challenging time for the health system. Jackson, like other health systems across the country, is facing financial pressures from higher costs and lower reimbursement rates while also grappling with physician and nurse shortages, a rise in healthcare-related cybersecurity threats and higher demand for care in an aging Miami-Dade population.

Part of Jackson’s plan is to continue finding ways “to increase the number of paying patients who seek services across our health system,” Zambrana said. The newly minted CEO said the “bulk” of the health system’s revenue comes from hospitalizations, though it’s trying to grow its outpatient services more to meet the growing demand for care and bring more patients into the network.

“Our patients and their families are asking for care closer to where they live,” he said, mirroring statements made by executives at other South Florida health systems. Many are also rapidly expanding into pockets of the community that don’t have nearby access to care, part of a strategy to improve care, help with staff retention, and secure patients and revenue.

Figuring out ways to attract more paying patients, usually those who have insurance, will also be key for Jackson’s efforts to continue providing care to those who are underinsured or don’t have insurance. Zambrana said the health system cares for about 55,000 patients annually who don’t have insurance. Currently, while most care provided by Jackson is paid for through Medicare and Medicaid, about 42% of patients pay for services “with something other” than the two federal health insurance programs, according to Miami Herald news partner WLRN.

The money Jackson makes from paying patients goes back into the system to help fund its operations and cover the bill for patients who can’t afford the necessary medical treatment.

“I want to be really clear that residents should not worry,” Zambrana told the Herald. “We are, more than ever, the Jackson for everyone, and people who need us should come. We’re going to be there.”