Jeff council clears way for hospital privatization

Privatization not up for parish vote

The path is now clear for Jefferson’s public hospitals to be leased to one of three companies after the Parish Council removed a requirement that such a privatization be put to a vote of residents.

The council voted unanimously to roll back that restriction Wednesday after hearing 2 1/2 hours of public comments, punctuated at times with applause from those watching in the nearly-full council chambers.

As employees and administrators at the hospital, business groups and civic organizations made the case for removing the hurdle to privatization, a number of residents said they opposed taking the decision out of the hands of the people and worried about how the efforts would affect low-income residents.

The vote comes after years in which both East Jefferson General Hospital and West Jefferson Medical Center have seen their financial fortunes decline. The institutions are now operating in the red or on razor-thin margins.

That prompted the hospitals’ boards to consider a privatization effort aimed at shoring up the medical centers. But proponents of that measure said that deal would be quashed if they had to slug it out in a public vote in which competing health care companies could try to undermine the effort.

“A public referendum will degenerate into a political campaign where competitors who are not the lessee and have financial interest in blocking the proposition will be able to spend unlimited money to do so,” said Tony Ligi, head of the Jefferson Business Council.

Jefferson Parish had been unique in that both state law and parish ordinance required that any plan to lease the hospitals be put on the ballot. The requirement for a public vote was put in place decades ago after there was a public outcry against the possibility of privatization.

The Legislature scrapped the state law requiring a public vote earlier this year, at the request of parish and hospital officials. That left only the parish ordinance as a hurdle in the privatization effort. Under the proposal approved by the council, the hospital boards will be able to come to agreements with a private company that would take over the hospitals. However, the outright sale of the hospitals would still require a proposition be put before the voters.

Parish President John Young said that restriction should be seen as a sign of the close relationship between the hospitals and their community, but said changing times meant changes were necessary for the hospitals to continue serving the public.

“I’m sure with this, the goal is to get to a situation where people can still come to West Jeff and East Jeff and still see quality doctors,” Young said.

Opposition to the proposal largely centered on who would receive those services. Dalton Joseph, one of several organizers with the Service Employees International Union who spoke at the meeting, questioned whether those without insurance would still have access to health care at the hospitals after the privatization.

“What about the poor people, are they going to be guaranteed admittance in these hospitals?” he asked.

Sheriff Newell Normand, who chairs the East Jefferson hospital board, said the privatization was expected to improve services and scored better on quality of care than the hospitals as they currently exist in an evaluation used by the boards.

For their part, several council members said they were supporting the measure in order to improve services at the hospitals. Councilman Paul Johnston argued those now using the hospitals would still be able to use them and that by teaming up with a larger, private company the hospitals would have more bargaining power with insurance companies and be able to regain their financial footing.

“You’re not going to be denied services at one of our hospitals because we take on one of these big companies to help us,” Johnston said. “By us getting involved with these bigger companies we’ll be able to get a better bargaining tool.”

The hospital boards are currently considering proposals from three companies: Oschner Health Systems, which owns a large number of hospitals in south Louisiana; Louisiana Children’s Medical Center, which owns Children’s Hospital in New Orleans and is partnered with the state to run the New Orleans public hospital; and HCA, which runs Tulane Medical Center.

There are still several steps to go before the partnership can go through. Normand said he expects the boards will have chosen one of those three companies by late August or early September and come to the Parish Council for its approval sometime in the fall. The decision would then have to go to the Federal Trade Commission, which must review the deal to ensure it doesn’t violate anti-trust laws. It’s not clear how long that process would take, Normand said.

Ralph Brandt, head of the Civic League of East Jefferson, told the council that his group was dropping its plan to ask for additional delays to study the issue and had decided to come out in favor of dropping the proposition requirement. That came after conversations with Normand in which many of their concerns were addressed, Brandt said. Oscar Pipkins, with the West Jefferson Civic Coalition, also came out in favor of eliminating the need for a proposition and said partnering with larger hospitals would benefit health care on the West Bank.

Still, Normand said some opposition to the measure was inevitable.

“You’re never going to allay all the fears,” he said.