NEW ORLEANS, La. (WVUE) - East Jefferson General Hospital’s board of directors has begun consideration of a proposed partnership between the hospital and LCMC Health, a local healthcare entity, according to the hospital’s CEO Gerald Parton.
Parton said in an email to FOX 8 that the board will consider the proposed partnership during a special meeting on Tuesday and is expected to forward a recommendation to the Jefferson Parish Council for its consideration soon. The hospital is owned by the parish.
Parton called it “an important step in the process” in his written response to questions posed by FOX 8.
For months, negotiations between the hospital and LCMC Health have focused on a possible sale of the hospital or a lease agreement.
Scott Walker is one of the new at-large parish council members.
"This is a big deal for Jefferson Parish, and we need to get this right and the hospital means a lot to us as a parish,” said Walker.
Walker said positioning the hospital for the future is critical.
"Obviously, E-J is in dire straits financially and it's a jewel of Jefferson Parish, it has been for the duration of its existence. It deserves to be on a strong financial footing, it deserves to be here and as a council it's our responsibility to do what is best for the hospital to make sure that, that happens,” he said.
University of New Orleans healthcare economist Walter Lane, Ph.D., said it is becoming increasingly difficult for standalone hospitals to remain financially stable.
"It’s not that EJ is mismanaged or anything like that, that’s just the nature that standalone hospitals just can’t make it anymore. They’re the last one left in town,” said Lane.
Lane said reimbursement for healthcare services by government and private insurers has changed over the years.
"So, we've seen reimbursement rates for Medicare falling, recent rates for Medicaid are already enormously low, particularly in this state, so that's about half of all the patients for hospitals, [they] don't even cover the cost of care so, and Blue Cross and the other private payers have been, becoming tighter and tighter, in terms of that,” said Lane.
Parton said the hospital is currently meeting its financial obligations. Further Parton wrote, “The decision to partner with LCMC Health is a strategic action to preserve and strengthen the future of our outstanding community hospital. This action will help preserve the hospital, employee jobs and allow us to continue the level of patient care we have been identified with for nearly 50 years.”
Walker attended this week’s board meeting during which no action was taken on the proposed partnership.
"I did get a lot of insight into what was going to happen, some of which I can’t talk about right now, but I know that it’s a board that’s dedicated to doing the right thing for EJ and they know it’s the decision of all decisions coming up,” he said.
Walker said next week the full Jefferson Parish Council will get details on the negotiations during a closed-door session.
"When we hear all the ins-and-outs of what this hospital deal may be and what it entails, whether it's a sale or a lease, whatever aligns it best for the future I think is what the council needs to seriously consider and it's important for all of us to be on the same page with this, too,” said Walker.
A sale of the hospital would require voter approval and Lane said a lot is at stake.
"I'm hoping again through things like this that the citizens of Jefferson Parish realize that if they want to have that hospital, and it's very important to the parish, something's got to change, and that the citizens may have to ante up a little bit to keep their hospital because otherwise I think there's a real danger of that completely closing down if they don't do something,” said Lane.
A spokeswoman for LCMC Health said the details are still in negotiations and remain confidential and that its board of trustees voted unanimously to move forward.
Lane said confidentiality at this point is normal due to the financial information involved.