Jefferson Parish hospitals sell lease idea to residents

Size matters. It matters in football, it matters in paychecks and, according to Jefferson Parish Sheriff Newell Normand, it definitely matters in health care.

For the past few weeks, Normand has made that argument to business leaders throughout Jefferson Parish as he tries to garner public support for a change in law that strips Jefferson Parish residents of the ability to vote on whether East Jefferson General Hospital or West Jefferson Medical Center can be leased by another entity. That law, known as House Bill 383, has already been approved by the state House of Representatives and is now moving into Senate committee.

This week, Normand, the chairman of East Jefferson’s board of directors, began making his public push for supersizing the reach of the parish’s two hospitals.

Normand, along with East Jefferson Chief Executive Officer Mark Peters, discussed the hospitals’ lease with the Civic League of East Jefferson on Monday. Another presentation is scheduled at West Jefferson Medical Center on Thursday with Nancy Cassagne, the chief executive officer of that facility. The crux of the presentations is simple: Health care is changing, and if Jefferson Parish doesn’t change quickly, the consequences are drastic.

“How big is big? Right now you can’t be big enough from what I’m hearing,” said Normand, who compared the current health care landscape to a massive game of musical chairs. “When the music stops, you better have a seat … There are going to be dire downstream implications of you standing up alone.”

Health care entitles across the country have been merging and increasing their size for years as they seek to spread costs across the largest number of payers. In addition, with possible changes in reimbursement and requirements related to the Affordable Care Act, Normand said, the parish’s hospitals can’t continue with their same strategy. Peters put the consequences of a failure to secure a private partner in even more blunt terms.

“If we don’t do something different, we will have to cut services,” Peters said. “We have the obligation to say this isn’t heading in the right direction.”

This isn’t the first time Jefferson Parish’s hospitals have talked about collaborating with a partner to secure their future. In 1995, East Jefferson and West Jefferson began discussing a merger with six other New Orleans-area hospitals including Ochsner Foundation Hospital, Slidell Memorial Hospital and Children’s Hospital. That alliance, which Normand labeled prescient, would have mandated the hospitals make joint decisions about care, while pooling their resources to better deal with the changing health care market. Normand said it’s amazing how that proposed alliance predicted the issues that challenge hospitals today.

However, the deal fell apart as politicians railed against secretive deliberations and residents expressed fear about a possible sale of the facilities. The Jefferson Parish Council banned the hospitals from selling, buying merging or affiliating with any other hospitals or institutions without council approval. They also pushed for a state law that required a public vote on the sale or lease of the hospitals. Eventually, the entire enterprise collapsed under the political pressure.

Normand said the backlash was tied to the connection Jefferson Parish residents and politicians have to the hospitals. The facilities were created in the 1950s and 1960s as a way to boost the attractiveness of Jefferson Parish for those residents seeking to flee New Orleans, Normand noted.

That community bond is partially why the parish was able to attract 17 suitors when it began discussing leasing the hospitals more than two years ago, Normand said. Officials haven’t disclosed those suitors but have whittled down the list to three finalists.

“Everyone really wants to be with East Jeff and West Jeff,” Normand said. “We’re near and dear to a lot of people’s hearts.”

Normand argued that the push to eliminate public input isn’t tied to doubts about people’s intelligence but instead is linked to a longtime fear about airing secrets that could hurt the hospitals in a competitive sense. A consultant hired to shepherd the hospitals through the lease process has said a public vote could air dirty laundry that could damage the bond between the two hospitals and parish residents.

“Win or lose, you lose,” Normand told residents. “There’s a lot of value in cynicism, but sometimes we can’t stare the obvious in the face and walk around it. ... I think the two boards in their deliberative process realized there was value in taking this route.”

If the change in state law passes, Normand said the hospitals will ramp up their negotiations and look to wrap things up by October. The hospitals’ choice would then be presented to the council for approval. Normand said the lease would run for 30 years and would include up front lease payments that would vary in size depending on if the hospitals are leased by a for-profit or non-profit entity.

However, any deal would allow East Jefferson to shed about $300 million in debt and retirement obligations, while West Jefferson would shed around $168 million. Existing contracts and leases would be maintained, Normand said. Unlike the state’s push for privatization of its hospitals that could result in more than 5,200 layoffs, employees at West Jefferson and East Jefferson would keep their jobs, Normand said.

Some residents expressed concerns about parking and community impact, but Normand said the new management group will have to abide by all parish ordinances. He noted that revenue from the lease would be dedicated to medical expenses.

“There is no risk to the public,” Normand said.

Thursday’s meeting at West Jefferson Medical Center in Marrero is scheduled for 6:30 p.m.