The financial outlook for West Jefferson Medical Center in Marrero was so bleak in recent years that Jefferson Parish officials decided the only way to save the institution was to lease it to a private operator. After years of discussions, a half-billion-dollar deal was finalized late last month.
Yet those financial straits weren’t enough for the medical center to discontinue — or even scale back — a health care plan that in the first nine months of this year provided almost $500,000 in free doctors visits and prescriptions for hospital executives and members of the facility’s advisory board, plus their spouses and other dependents, according to records obtained by The New Orleans Advocate.
And even though West Jefferson’s executives and advisory board members now report to LCMC Health — which on Sept. 30 closed the deal to lease the hospital for at least 45 years in return for $200 million in rental fees, $340 million in capital improvements and other payments — it appears that the unusually generous health care program could still cost the parish money for some time to come.
Just how much depends on what the Parish Council decides to do in the coming months.
Before the lease deal was finalized, members of the executive team and advisory board running West Jefferson Medical Center participated in a program that covered prescriptions and medical care for them and their immediate relatives.
That program — which had in the neighborhood of 45 members as of September — paid out $1.76 million in medical benefits from Jan. 1, 2010, through last month, not counting prescription costs, parish records show. Of that total, $308,391 was racked up in the first nine months of 2015.
Figures on prescription costs for the entire time period weren’t available Tuesday; but they amounted to $189,950 from Jan. 1 through September, bringing the program’s total cost for the first nine months of 2015 to $498,341.
West Jefferson’s rank-and-file employees were on a separate medical and prescription insurance plan to which they contributed money.
LCMC Health, as part of the lease agreement, said it would retain “substantially all” of West Jefferson’s full-time staff and management, totaling about 1,800 people. It said the executives’ and employees’ benefits would remain unchanged through 2015 before being integrated into the private operator’s coverage plans.
However, things are somewhat different for the 10 members of the hospital’s advisory board. Former Chairman Chip Cahill and nine colleagues who were appointed by parish officials have switched over to a 14-member advisory board that reports to LCMC, which has said it does not intend to give them free medical insurance or any other form of compensation for their service.
Cahill recently said he and others on the 14-member board would like to serve on a reconstituted advisory board reporting to the parish, but that may not be an option.
In September, the Parish Council passed an ordinance saying the parish and LCMC boards cannot share members, a prohibition meant to prevent conflicts of interest between boards representing the landlord and the tenant in the lease arrangement.
Several Parish Council members have said they have not yet thought about whether to provide members of the new advisory board with the same medical benefits offered before the lease. One question will be whether a body whose duties no longer involve operating a hospital should receive the same benefits extended to the board members who oversaw West Jefferson.
Nonetheless, the signing of the lease doesn’t necessarily signify an abrupt end to all benefits for the 10 West Jefferson board members who have transitioned to the new subsidiary LCMC board.
According to the insurance plan that applied to them, unless the Parish Council votes to terminate that package, they and their families are entitled to about three years of COBRA benefits afforded under a federal law to people who suddenly lose their coverage.
It wasn’t clear Wednesday how much those benefits could cost Jefferson.
Cahill has said he thinks the parish should give COBRA benefits to the board members now with LCMC because some had no other health insurance aside from what they got through the board.
Most Parish Council members have had little to say about the insurance issue. However, Councilman Ben Zahn has said the lucrative insurance plan offered to a select few at West Jefferson may explain why that hospital was on pace to lose $6 million this year alone.
“Asking taxpayers to start covering these ‘new perks’ and expenses for ... political appointees again on a new board? I don’t think so!” Zahn said in a statement Tuesday.
The parish-owned East Jefferson General Hospital in Metairie offers its directors medical benefits as well, but they fall under the same plan as regular employees and they contribute to the cost, officials said.
After the failure of efforts to lease that financially troubled facility, its operations remain the responsibility of the parish and its board. It recently was reported to be on pace to break even relatively soon.