LCMC Health and Jefferson Parish officials have verbally agreed on terms of a 45-year deal that would lease West Jefferson Medical Center to LCMC for $225 million and $340 million in capital improvements, officials said Wednesday.
Jefferson Parish Council President Chris Roberts announced the agreement in principle a week after the council set a 30-day deadline for LCMC to either finalize a lease or cease negotiations with parish leaders, who have spent more than two years seeking a private operator for the publicly owned Marrero hospital.
Gregory Feirn, the chief executive officer of LCMC — which operates Children’s Hospital, Touro Infirmary and the Interim LSU Hospital in New Orleans — said Wednesday that he anticipates his firm and Jefferson Parish will “form a productive partnership.”
“LCMC houses locally based, nonprofit healthcare systems,” Feirn said. “We’re a natural fit for a community-based hospital such as West Jefferson Medical Center. They’re a fabric of that community — as is LCMC a part of the metropolitan New Orleans area.”
Roberts said he expects the council will call a public hearing to consider the terms within the next week. The parties involved won’t sign the deal until after the council ratifies it.
Roberts said the proposed lease terms are essentially what the parish had been seeking. The agreement is about 15 years longer than the parish envisioned, but it will result in about $20 million more in capital improvements, he said.
The council president and the LCMC chief said they hoped Wednesday’s announcement would be welcome news to hospital employees who have been uncertain about what their future holds.
Feirn acknowledged it must seem to the physicians and personnel at West Jefferson Medical Center that the lease talks have taken “an eternity,” and he vowed to carry out all coming transitions as seamlessly as possible.
“I believe … the physicians and employees will now have a sense of stability that our system will bring,” said Feirn, who said LCMC will absorb the present staffing at West Jefferson Medical Center and not change its composition after the final contract is signed.
Roberts said, “Hopefully, this can give them some peace of mind because it’s been going on for quite (a while). A lot of anxiety has been created by that.”
The privatization of West Jefferson Medical Center has been a tangled process dating back to at least 2012. That’s when the hospital and its counterpart in Metairie — East Jefferson General Hospital — started exploring privatization in hopes of improving their deteriorating finances.
But the boards of both hospitals couldn’t agree on which group should take over their operations. West Jefferson favored LCMC. East Jefferson preferred HCA, the national firm in charge of New Orleans’ Tulane Medical Center.
A divided Parish Council eventually agreed to let each hospital choose its own partner. But HCA by then had removed itself from consideration. The council then voted to start negotiations for LCMC to take over West Jefferson even as Ochsner Health System — the only other company in the running — withdrew its bid to run East Jefferson.
Negotiations have been private, but significant disagreements became obvious. The parish’s negotiators accused LCMC of arriving at the two sides’ first meeting with a dramatically different and less lucrative proposal than the one spelled out in an earlier letter of intent.
Differences included modifying the amount LCMC would pay toward improving the hospital and eliminating a section of the deal that would have seen LCMC assume about $33 million in pension liabilities.
LCMC denied the allegations and said the fact they were publicized showed the lease talks were dysfunctional. It even threatened to pull out from the negotiations.
Since then, there were reports that such major sticking points had been resolved, but there were other lingering snags as well, such as whether to pay off existing bonds with a lump payment and whether LCMC has to provide free medical care for parish prisoners. After a lengthy executive session at its Jan. 14 meeting, the Parish Council imposed its 30-day deadline to either cement a deal with LCMC or end negotiations.
No decision on the future of the East Jefferson hospital has been made yet.