In a surprise development, the newly constituted Jefferson Parish Inspector General’s Office plans to release a report Wednesday about the ongoing process of selecting a private company to run the parish’s two public hospitals, a wrinkle that will delay a final decision on the matter “indefinitely.”
Council members appear divided over which of three companies should run East Jefferson General Hospital and West Jefferson Medical Center. Even as some members were pushing to slow down the process and the boards of the two hospitals remained “deadlocked” on a recommendation, a final vote had been planned for Thursday.
But the pending report from Inspector General David McClintock has thrown a wrench in that schedule. Council Chairman Chris Roberts said in a text message Monday night that he is postponing the meeting so council members can receive and review the report.
“This will allow the council to digest his findings,” Roberts said. “Today was the first notification from the IG of an expected report.”
Roberts said he did not know what the report will address and that he was only notified that it was being prepared Monday.
McClintock got involved in the hospital decision last month, announcing he would “monitor” the process as his first public assignment since taking office. At the time, the inspector general said he would mainly be gathering information so his office would understand the issues involved in the lease and be able to advise on a final contract and keep tabs on the privatization as it went forward.
Since then, McClintock has attended the closed-door meetings that have been the norm throughout the selection process. The hospital boards, and the council itself, have broad latitude to discuss issues related to the privatization in executive session under a law that protects strategic discussions about public medical centers.
McClintock could not be reached for comment Monday evening.
News of the report came the same day that Roberts and Councilman Elton Lagasse, the council’s two at-large members, said they would be voting to lease the two hospitals to Louisiana Children’s Medical Center. At the same time, the chairmen of the two hospital boards said their members were deadlocked between Children’s and national hospital company HCA and did not see a way to reach a consensus.
In an open letter, Roberts and Lagasse said Children’s, the nonprofit that runs Children’s Hospital, Touro Infirmary and the LSU public hospital in New Orleans, would be the best fit for the missions of the two Jefferson hospitals.
“All things being considered LCMC gives Jefferson Parish the best opportunity to work with a proven partner while maintaining the mission of providing quality care in a family atmosphere,” Roberts and Lagasse wrote. “This decision is not based upon partnering our hospital with the highest bidder. Rather, this provides the best solution to keep our public hospitals under the governance of a deep rooted community based organization that remains obligated to the needs of our residents. The two councilmen are the first to openly reveal their preferences, though the council itself still seems divided on the question.
Councilwoman Cynthia Lee-Sheng and Councilman Ben Zahn both sent emails to Roberts last week calling for the vote to be postponed. They have sought to have Kaufman Hall, the consultant hired by the hospital boards, offer a recommendation.
A similar request was made by Jefferson Chamber officials last week. Chamber President Todd Murphy and Chairman of the Board Johnny Domiano, who called for the council to “take a breath” and allow more information about the proposals to be made public before a decision is made. That letter, sent to council members, notes the board supported legislation that allowed the council to move forward with a lease of the hospitals.
“We did so in the spirit that the discussions would be all-encompassing and that the joint Hospital District and the Council would have all information necessary to make the right decision and then defend that position for three decades,” according to the letter. “We respectfully ask that the scope of information needed in order to make a sound decision is gathered, reviewed in-depth and quantified in a summary report.”
It’s unclear whether Lee-Sheng and Zahn support Children’s; HCA, a national chain that offered the highest bid for the hospitals; or Ochsner Health System, the regional health care giant. Some council members have expressed concern about a provision in HCA’s contract that would require the parish to reimburse the company for any improvements made to the hospitals that had not fully depreciated at the end of the 30-year lease envisioned as part of the selection process.
Monday’s meeting of the two hospital boards did not bring those bodies, which have been at an impasse since last month, any closer to a consensus. Sheriff Newell Normand, who chairs the East Bank board, and Chip Cahill, who chairs the West Jefferson board, confirmed after the meeting that while the East Jefferson board preferred HCA, the West Jefferson board favored Children’s.
“We can beat this dead horse forever, but we’re at a deadlock,” Normand said.
The two men laid out philosophically different reasons for those preferences.
Normand said HCA, as a for-profit company, would be able to tap into equity markets to pay for improvements, potentially providing a better financial position than the nonprofit companies that would be limited to issuing bonds for any construction or equipment used to improve the hospitals.
Cahill said he believed Children’s would be a better fit for the culture of the two hospitals.
The East Jefferson board met for about an hour and a half in executive session Monday morning before spending an equal amount of time in a closed-door, joint meeting with the West Jefferson board. But during that time, none of the board members appeared to have moved from their positions.
Normand said four votes were taken during the joint session, which was technically a meeting of the umbrella district that covers both hospitals, but none of those garnered the 12 votes needed to pass. Motions to have Kaufman Hall give an official recommendation on the decision, to allow the hospitals to go with different companies, and to recommend Children’s all failed to pass during that session.
A fourth vote, to recommend Ochsner, also failed, though Normand said that was for procedural reasons.
The lack of a recommendation from the two boards will not prevent the council from making a decision and the failure of the motion allowing the hospitals to be split will not bind the hands of council members, Normand said. However, since Kaufman Hall works for the hospital boards on a $1.2 million contract, the failure of the vote asking for a recommendation means the consultants will not present their opinion to the council.