The marriage of the University of Florida and the city of Jacksonville at the Eighth Street medical campus has had its ups and downs, but the city is pumping more money than ever into UF Health Jacksonville while it stabilizes its shaky finances.
Mayor Donna Deegan is proposing $56 million as a subsidy for UF Health Jacksonville's daily operating expenses, up from $40 million this year and double what the city's contribution was just five years ago. Her budget proposal adds another $38 million next year for building improvements.
"We have one safety-net hospital in this city that deals with every single one of our most vulnerable citizens," Deegan said. "Every other hospital in Jacksonville sends all those people to UF Health and, frankly, it's an overwhelming cost to them, which they just can't recover from."
The UF Health Jacksonville's campus on Eighth Street, just off Interstate 95, has a unique role in the region's healthcare system because it is a teaching hospital affiliated with the University of Florida colleges of medicine, nursing and pharmacy. About 8,000 people work at the campus including 446 faculty members and 445 residents and fellows.
Generations of Jacksonville residents have gone to the hospital for medical care, many lacking insurance that will cover the cost of their treatment. The hospital is the only Level 1 trauma center in northeast Florida and southern Georgia for the most life-threatening emergencies.
A decade ago, UF Health Jacksonville leaders were warning the hospital might have to close because the city wasn't spending nearly enough to support it. Their appeals to city leaders didn't move the budget needle, however, because the city had its own budget woes. That changed during Mayor Lenny Curry's time as mayor and Deegan is continuing to steer more taxpayer money to UF Health Jacksonville.
City Council member Ron Salem, who is chairman of the Finance Committee, said he supports boosting the city's financial support in the 2024-25 budget.
"It's needed," he said. "I think UF Health in general was underfunded for a lot of years. We're now getting it to where it probably should be and I think that's important."
Along with more money for UF Health Jacksonville's operating costs, Deegan's budget would put up $38 million for continued repairs and renovation of the city-owned buildings that house UF Health Jacksonville along Eighth Street. Part of the city's money would go toward constructing a new emergency room. Deegan's five-year plan calls for another $96 million spread over the following four years.
That will be on top of the $140 million the city has directed for building improvements since 2019 — $115 from city taxpayers and another $25 million in federal pandemic relief money. When it's all added up, the city-owned buildings on Eighth Street will get a total of $274 million for work on them over a decade.
"We’re extremely grateful for Mayor Deegan and the City Council’s continued support of UF Health Jacksonville, which helps us fulfill our mission of serving our patients and our communities throughout Northeast Florida," UF Health Jacksonville CEO Patrick Green said in a statement.
He said the city's annual support for operating costs is a "key part of providing services to thousands of patients in the city each year, and the funding for capital improvements has been crucial to maintaining and improving the integrity of our facilities."
That city doesn't have any legal requirement to pay for work on the buildings. UF Health Jacksonville leases the buildings for $1 a year and is responsible for their maintenance. But the city stepped in to help foot that bill so UF would shoulder less cost for maintenance.
UF Health Jacksonville can use the help. Moody's downgraded its credit rating for the hospital system in March 2023 and put a negative outlook on the rating, a warning that more downgrades could be coming. Fitch Ratings kept the same credit rating for the system in November but downgraded the outlook to negative .
Both rating agencies cited financial pressure caused by an increase in the cost of running the hospital system on a day-to-day basis. Moody's later lifted its negative outlook in an updated credit rating released in February that changed the outlook to stable based on improved operating performance and a trend toward better cash flow.
But Moody's rating of Ba1 for UF Health Jacksonville still tells private investors that the hospital system is a high credit risk for repaying its debt.
UF Health Jacksonville covers two hospitals: the long-established one on Eighth Street and the newer UF Health North campus on the Northside near River City Marketplace. The hospital on Eighth Street has 603 beds. UF Health North recently opened a second tower giving it 216 beds.
UF Health Jacksonville took on debt to build the Northside medical center, but ratings agencies say it eventually will help the overall system because UF Health North has a stronger mix of patients whose insurance will cover their medical care.
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But until that happens, UF Health is seeking more help from the city and the state. The state Legislature took the unusual step of providing $15 million in its 2024-25 budget to help UF Health Jacksonville pay its daily costs. State Sen. Clay Yarborough, R-Jacksonville, sponsored that addition to the budget.
That state money for operating costs comes after the Gov. Ron DeSantis and the state Legislature earmarked $80 million in 2022 for construction of a new trauma center and emergency room. The city also would help pay for that new construction because $14 million of the $38 million proposed by Deegan for building improvements would be for the trauma center. Its ground-breaking is slated for later this year.
This article originally appeared on Florida Times-Union: City support rises for strengthening UF Health Jacksonville's safety net for poor patients
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