The long and tortuous path toward the selection of a private company to run Jefferson Parish’s two public hospitals could get a few more curves Wednesday as the Parish Council debates whether to potentially throw the issue of whether to lease the hospitals at all to the voters.
The argument to send the issue to the voters, a step the Parish Council deliberately removed in the summer, was spurred by comments made by a consultant seeking a contract to review the various proposals now on the table. In his submittal, Joshua Nemzoff, of Nemzoff and Co., of Pennsylvania, said there would be little practical difference between a lease and a sale of East Jefferson General Hospital and West Jefferson Medical Center.
“You can consider this as some free advice, but whether you sell these hospitals or enter into a prepaid lease, they are gone and they won’t be coming back,” Nemzoff wrote.
The Parish Council has been locked since last year in a battle over whether to lease one or both of the hospitals to Louisiana Children’s Medical Center. The boards of the two hospitals split on which applicant to recommend. Ochsner Health System is also a finalist in the process, though the company’s proposal has never gotten significant traction among council members.
A path out of that deadlock appeared possible earlier this month, when the Parish Council voted to seek an outside review of all the proposals on the table. The exact amount each of the submissions, particularly HCA’s proposal, would be worth to the parish has been a source of significant controversy.
But Councilman Chris Roberts, who supports leasing both hospitals to Children’s, said that in view of Nemzoff’s comment, the council should now consider whether it can move forward with the leasing process at all.
Last year, the Legislature and Parish Council removed requirements that would have forced the council to get voters’ approval before leasing the hospitals. However, they left in place a prohibition on selling the hospitals without a public referendum.
Nemzoff’s letter casts doubt on whether the council would be abiding by that restriction, since it equates a lease and a sale, Roberts said.
“If we’re made aware of that and there’s an existing state law that requires a voter referendum to sell the hospitals, would it be malfeasance if we proceed?” Roberts asked Tuesday.
In his proposal, the only one received by the parish in response to its request for a firm to evaluate the contracts, Nemzoff said arguments over what will happen at the end of the lease — one of the issues that has taken center stage at various points in the debate — are misguided. While acknowledging legal differences between a sale and a lease, he said that given the time frame involved, there are few practical differences between the two in this case, and the hospitals will never again be managed by the parish.
“It has never happened in the past, and it is likely not going to happen on your deal,” he said.
Roberts said he plans to propose the council ask for an opinion from the Attorney General’s Office on whether the parish should put the issue to a public vote.
“When you’ve got somebody like that making those comments and saying those things, how do we simply ignore them and not raise these points that I think are our obligation to raise?” Roberts asked.
But Sheriff Newell Normand, who chairs the East Jefferson General Hospital board and has pushed for either leasing both hospitals to HCA or splitting them between the two companies, said there’s a legal distinction between a sale and a lease, regardless of whether the hospitals end up back under direct parish control.
“I think what the expert was saying is, we’re getting bogged down in what’s going to happen in the 30th year,” Normand said. “And he’s saying, ‘Do you really think you’re getting back into the business after 30 years?’ And our answer to that is, ‘No.’ ”
For months, the council has been split 3-3 on the leasing issue. Councilman Mark Spears holds the swing vote and has consistently said he does not have a preference. Spears, who could not be reached for comment Tuesday, also pushed to bring in an independent firm to review the proposals.
Councilwoman Cynthia Lee-Sheng, who has supported the idea of splitting the hospitals, said she plans to continue moving forward with an outside review of the hospital proposal and doesn’t support Roberts’ interpretation.
“I think the next step is we hire a national expert, someone who has expertise to do a bid analysis on the proposals,” Lee-Sheng said. “I think that’s what a lot of business groups have wanted to see and what the inspector general wanted to see.”