With all of the rhetoric flying about which company is
better to lease Jefferson Parish’s two public hospitals, I suppose that Sheriff
Newell Normand is running out of appropriate adjectives.
In a well-written article on Nola.com, Ben Myers reports
that Normand labeled Children’s Hospital debt ratio as in “the sucky arena”.
“They are burdened with that ratio, and they are very, very
nervous.”
I guess that means they are more nervous than being only “very nervous”.
Someone please get that man a Thesaurus for Christmas.
Normand, who in addition to being Sheriff of the 2nd
most populous parish in the state, owns several corporations, floated his name as a potential Gubernatorial candidate, and championed the rezoning of Fat City
(how’s that working out?), is also the Chairman of the East Jefferson General
Hospital board.
He is also an advocate of the for-profit Hospital
Corporation of America (HCA) in its quest to take over the hospitals.
Initially, the Parish Council and the hospital boards said
they would prefer to lease the hospitals together. Since there has been an
impasse, with East Jeff siding with HCA while West Jeff prefers the non-profit Children’s, the
East Jeff Board now says that they are willing to go it alone.
Of course, regardless of which company (or companies) is
chosen to operate the hospitals, the broader questions have been left
unanswered: Why is there a need to lease the hospitals at all and why remove
the people of Jefferson Parish, who own the hospitals, from the process?
Normand argues that
the hospitals are losing money, draining their cash reserves and, with
increased Medicare and Medicaid costs and the looming uncertainty over
ObamaCare, the hospital’s financial situations are in such dire straits that a
change is required.
But, that’s a false argument.
East Jefferson had cash reserves of $133 Million in 2012,while West Jeff’s reserves stood at $150 Million.
And, while it’s true that the cash reserves for both
hospitals were considerably higher pre-Katrina, the hospitals have not cut back
on capital expenditures for buildings and equipment. Reducing expenses for
capital projects is one of the first steps any business owner would take to stem
a decline in revenue.
If the hospitals were estimated to lose a combined $15
Million in 2012 with over $20 Million spent on capital improvements, at the
current rate, the hospitals would burn through their cash sometime around 2031.
That’s without cutting back on anything.
In addition, both facilities have numerous properties that
could be sold or leased to bring in additional revenue. For instance, West
Jefferson owns a strip shopping center that could easily be divested.
The hospitals have combined some minor services but still
are largely autonomous. Both have separate management, staff and boards. A tiny
fraction of service, supply, maintenance and equipment contracts are combined.
Completely combining the operations of the hospitals and
significantly reducing costs, could afford the hospitals the opportunity to
continue to be publicly owned.
This potential option, and the reason why it is not being
considered, has never been articulated by Normand or hospital administrators.
Perhaps it’s not “sucky” enough or Sheriff Normand doesn’t
want to let us all in to the party.
While leasing the hospitals would provide a cash infusion for
Jefferson Parish (and property taxes from the for-profit HCA, if they were
selected over Children’s), the hospitals financial situation is far from the
dire portrait that Normand and other are painting.
No, Sheriff Normand, the fact is that you’ve never told the
people of Jefferson Parish the whole truth, you haven’t explored every option
and you certainly haven’t been open and transparent with the two most valuable
assets in Jefferson Parish.
And that really is “sucky”.
