The board of East Jefferson General Hospital is, once again, hoping to entice the national hospital chain HCA to take another look at leasing the financially struggling local medical center, but HCA officials say they have no plans to do so.
Sheriff Newell Normand, who chairs the parish-owned hospital’s board, said HCA remains the board’s first choice to take over the hospital’s management, and on Wednesday he asked the Jefferson Parish Council to formally request the for-profit chain to reconsider its withdrawal from the process of choosing someone to lease EJGH.
“We very much still strongly desire to have HCA as our partner,” Normand said. “I would ask that this council write a letter to HCA asking them to come back in.”
But while Normand said a letter signed by all seven council members — including those who publicly criticized the company during the lease discussions that have been going on for nearly a year — could bring HCA back, company officials appeared to pour cold water on that idea Wednesday evening.
“We are not now, nor do we plan to re-engage, in this process,” HCA spokesman Kristian Sonnier said.
Normand’s appearance before the council came as the future of the East Jefferson hospital remains uncertain, with no clear candidate to potentially take over its operation.
It also came as council members raised questions about how federal regulators’ rejection of the financing that underpins the state’s deal with LCMC Health, which is now negotiating to lease West Jefferson Medical Center, would impact that nonprofit local company’s ability to run the West Bank hospital.
The council did not vote on Normand’s request Wednesday but is expected to take up the issue at its next meeting.
Officials with HCA, which has been East Jefferson’s first choice as a partner throughout the lengthy privatization process, have maintained they are no longer interested in leasing the hospital. They withdrew their proposal earlier this year, saying the process had gone on for too long and there was no clear resolution in sight. The company’s decision to drop its bid came as council members battled over whether HCA or LCMC should be selected to run the two hospitals or if they should be leased to different operators.
Normand said East Jefferson continues to reach out to other companies as well. “We’ve been having conversations with multiple parties around the country, and we’ll continue to do so,” he said.
Observers have said it will be difficult for East Jefferson to entice a new player into the New Orleans-area hospital market, particularly to take over just a single hospital. Such a scenario would go against recent trends in health care that have seen companies seek to put together regional systems aimed at using economies of scale to cut down on costs.
But that leaves few options for East Jefferson in light of the withdrawal of HCA, which runs Tulane Medical Center. LCMC has submitted a bid for East Jefferson but was rebuffed. The only other major player in the New Orleans market, Ochsner Health System, withdrew its bid for East Jefferson on the same day the council selected LCMC to try to negotiate a lease for West Jefferson.
In the interim, EJGH is going through a “strategic planning process” aimed at boosting its bottom line, Normand said. He did not go into specifics but said the hospital expects to complete that effort in June.
“The issue ... is about putting cash in the bank and making money on your day-to-day operations,” Normand said. These are “stressers that healthcare institutions are facing around the country.”
Council members raised questions about LCMC’s status, particularly after federal regulators shot down the financing plan the state used in the privatization of LSU hospitals in New Orleans and elsewhere in the state.
LCMC President and CEO Greg Feirn expressed optimism that the issue can be worked out through discussions among the company, the state and CMS, the federal Centers for Medicare and Medicaid Services.
“We have all the confidence in the world the state will get the payment side and how this program is financed through CMS resolved,” Feirn said.
Council members focused on issues with the state’s financing plan, which regulators have said uses large up-front payments from companies like LCMC to draw down additional Medicaid money that then goes back to those companies.
But parish officials said they also are worried about whether LCMC would lose the money it already has put into the deal should the state fail to reach an agreement with the federal government.
“Our concern is: If you lose this deal, the $260 million you’ve already put up, will you ask for that back?” Councilman Paul Johnston said.
Feirn said that would not happen because its contract would allow LCMC to be reimbursed if it did not get use of the hospital.
Feirn also touted LCMC’s financial stability and attempted to dispel any concerns about a fungal outbreak at Children’s Hospital six years ago in which five patients died. Feirn stressed the primary cause of those patients’ deaths was not the fungus and that the U.S. Centers for Disease Control “commended” the hospital for its handling of the situation.