In The News › Start over, sell hospitals

Dec 16, 2013

Source: Gambit

Filed under: Contracting, Hospitals, Jefferson Parish

Start over, sell hospitals


December 16, 2013

The Jefferson Parish Council has been deadlocked for months over the biggest fiscal and policy question to confront the parish in at least a generation: the proposed lease of Jefferson’s two publicly owned hospitals to a private operator. At the outset, officials at East Jefferson General Hospital (EJGH) and West Jefferson Medical Center (WJMC) wanted to put their respective institutions on a path that would guarantee long-term financial and medical viability. Their intentions were good and their reasoning well-founded, but the process has been fraught with problems from the get-go. Closed-door meetings, claims of conflicts of interest, ambiguous evaluation criteria and political maneuvering have delayed the council’s decision and added to the angst of medical staff, patients and voters. As things stand now, a final decision appears to be at least six months away, possibly longer, while the council tries to hire yet another independent consultant.

According to the nonpartisan Bureau of Governmental Research (BGR), the Byzantine process used by the council underscores all that’s wrong with Jefferson’s historically politicized, council-centric procurement policy. “It’s just another example of why there’s such a pressing need there for reform,” said BGR president Janet Howard, who added that the selection process has been “shrouded in secrecy” and “overly subjective.”

We agree, and we would add that things have now reached a point that citizens have little basis for confidence in the council’s ultimate decision. For those reasons and more, we suggest that parish leaders scrap the entire selection process, cease throwing good money after bad (on more consultants’ fees) and start over — but this time, the end result should be a sale of the hospitals, not a lease.

This may strike some as an outside-the-box suggestion, but in truth it is no more extraordinary than leasing the hospitals. Consider the undeniable facts that brought both institutions to this point:

  • Health care is getting more complicated and more expensive by the day — to the point that community hospitals all over the country are scrambling to partner with, or be acquired by, large private health care providers.

  • By all objective accounts, the coming decades will bring even more financial pressures on community hospitals.

  • Under either a sale or a lease, Jefferson Parish will be getting out of the health care business, and it’s highly unlikely ever to get back into that business.

  • Despite the council’s best efforts to get independent outside advice, the lease process has been imbued with politics, intrigue and devilish complexity. What was supposed to be an objective process has degenerated into an emotional contest of wills between the two hospital boards and their political patrons.

Given all that, and given that the parish has already decided that it no longer will control what goes on inside its publicly owned hospitals, why hold on to those facilities at all? Leasing them to a third-party operator will generate revenue, but not nearly as much as an outright sale. Moreover, a sale would be a far “cleaner” — and simpler — transaction, one far less likely to trigger litigation that will only further delay third-party operation of the hospitals and further diminish public confidence.

In addition to all those reasons, a sale has far greater potential to take politics out of the equation because it can be accomplished under the public bid law — provided the council adopts a straightforward set of bid specifications. This is paramount, and eminently doable. Bidders should be required to pay the entire sale price at the closing and pay off the hospitals’ debts. The highest bidder would get the hospitals, with no council action (read: interference) required. Moreover, all of the proceeds of a sale could be placed into a trust fund, with interest dedicated to infrastructure improvements and public safety.

Opponents of a sale no doubt will argue that it’s too late to turn back now, but that’s nonsense. The many delays already encountered are a big red flag warning of more trouble ahead. Others may suggest that a sale would take away the parish’s ability to guarantee patient-centered care. That, too, is nonsense. Even under a lease, the private operator would determine hospital policy — and the market will dictate levels of patient care far more efficiently than the parish council.

As for timing, the council’s latest tack has delayed a final decision at least until next summer, and litigation could further delay implementation. A sale would require legislative action and a referendum, but those steps would bring finality and clarity — and give voters a voice in charting the institutions’ future, even if it means selling them off.

Dec 16, 2013

Source: Gambit

Filed under: Contracting, Hospitals, Jefferson Parish

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