St. Bernard hospital to seek federal help to expand services

Months after voters overwhelmingly rejected a special one-year property tax to pay for expanding medical services at 2-year-old St. Bernard Parish Hospital, the facility’s interim chief executive plans to ask the U.S. Department of Agriculture to lend him most of the cash.

But getting the USDA’s approval likely will be “very difficult,” said Wayne Landry, the head of the parish-owned hospital.

The St. Bernard Parish Council passed a resolution this week approving the five-member St. Bernard Parish Hospital Service District’s request to issue up to $7.8 million in bonds, which would be paid back from future revenues. That money would mostly be used to hire two or three health care specialists and to implement a much-needed electronic medical records system, Landry said.

In the wake of the April election defeat — in which voters rejected a 30-mill tax that would have generated an estimated $9 million for the 40-bed hospital — Landry said the facility was not in financial jeopardy but would need to scale back ambitious plans to offer more specialty medical care.

Now, instead of hiring eight specialists, the hospital plans to use some of the loan to hire two or three, likely including a general surgeon, a thoracic surgeon and a urologist, he said.

About $2 million of the loan would go toward repaying an earlier bond. According to the council’s resolution, which passed 6-1, this bond would be paid off in 10 years or less at a rate not to exceed 8 percent.

Still, the council’s resolution “doesn’t guarantee that we’re going to get this loan,” Landry said in an interview this week.

That’s because the application process is handled by the USDA’s rural development program, and St. Bernard would have to obtain a waiver in order to qualify because, according to federal guidelines, the parish is not considered rural, Landry said.

The hospital tried obtaining a loan this way once before but failed. Now, after the council’s vote, Landry said he is “guardedly optimistic” that USDA officials will be more sympathetic.

“That’s a big hill to climb, so that’s not a slam dunk,” he said, but Tuesday’s council vote was aimed at “putting ourselves in a position to finally go before the USDA.”

The federal agency also would have final say on the total amount of the loan, he noted.

In the meantime, Landry said, hospital officials need to seek approval for the plan from the state Bond Commission, which could happen next month. Until then, the hospital needs to get its paperwork lined up with the USDA, he said.

Landry pegged his odds at “better than 50-50,” saying, “At the end of the day, I’ve got my fingers crossed. This is as creative as we can get.”

He said the hospital is on track to make about $600,000 this year, a figure that he said would grow with the right medical specialists in place.

The parish built the $70 million hospital after Hurricane Katrina, using a combination of federal disaster money, tax credits and state capital outlay dollars.

Follow Richard Thompson on Twitter, @rthompsonMSY.