Officials with St. Charles Parish Hospital and Ochsner Health System were grilled by members of the St. Charles Parish Council on Monday about a recently-announced partnership between the two healthcare providers. Under the partnership, Ochsner will take over the day-to-day management of the Luling hospital, which they say will improve the efficiency of operations and expand services offered in St. Charles Parish.
“If you don’t believe today is the right day to be entering into a partnership with a larger system to help this hospital address the future, then you really haven’t kept up with healthcare,” Federico Martinez, CEO of St. Charles Parish Hospital, said. “I know it is a parish-owned facility, but you will be hard pressed to find a facility that is not part of a larger facility regardless of the ownership, regardless of the corporate entity that exists. We need to have a good partner.”
However, the agreement would come without certain entanglements for Ochsner–namely responsibility for the $46 million debt the parish hospital has accumulated over the years.
Councilman Billy Woodruff took issue with the idea that Ochsner may not be responsible for helping the parish retire some of that debt.
“As of yet none of us have seen any terms of the agreement. Financially, is Ochsner bringing anything to the table other than good advice?” he asked.
Pete November, general counsel and senior vice president of corporate compliance for Ochsner, said those details are still being worked out.
“We are still working on the agreement. The reason this came out is because we wanted to start the relationship in the beginning of the fiscal year, which was Aug. 1. There was a 60-day notice requirement. That is why we published the notice when we did and the agreement is still in process,” he said.
Woodruff said the idea of Ochsner not having ultimate financial responsibility for the hospital under the agreement would not sit well with him.
“You sit at the table and the taxpayers are going to pick up the tab,” he said.
Woodruff also felt like council members and the parish community should be told more details about the agreement. “I feel like you are trying to sneak something past us and you all are going to stick it to the parish,” he said.
In contrast, November said when the final deal is done he believes Ochsner will have a large stake in the success of the hospital.
“We are still working out all of the details, but we will have risk if the hospital is losing money. We are fully aligned with all of you to improve the bottom line,” he said.
The pace of repaying the current debt the hospital is carrying is expected to pick up as property tax base increases over the next few decades.
Councilman Terrell Wilson said he and other parish officials recently sat in on a meeting with St. Charles Parish Assessor Tab Troxler in which Troxler showed them a chart estimating that the parish’s property tax base would rise considerably in the upcoming years.
Councilman Jarvis Lewis asked a pointed question on whether Ochsner would actually add to that tax base.
“Will Ochsner at least contribute to our property tax base? Will you own any buildings and contribute to our property tax base?” he said.
November responded that Ochsner would not be adding to the parish’s tax base.
Councilwoman Carolyn Schexnaydre took issue with the parish hospital’s debt and was outraged by Martinez’s assertion that the hospital would likely remain in debt no matter what the economic circumstances are.
“Any other CEO would have been fired for what you are doing,” she said.
However, Betty Portera, who has served on the Hospital Service District Board for more than 30 years, said that the people of St. Charles Parish want local health facilities to improve their quality of life.
“We have the bridge parks and the playgrounds (to improve the quality of life). It is not the idea of making money, it is having it for the parish,” she said.
Portera points to the hospital’s growth and expanded services during Martinez’s tenure as a sign that the board has been moving in the right direction.
“We get things going and it takes money to do it,” she said. Martinez has been with St. Charles Parish Hospital since 1986 during which time hospital facilities have increased from 45,000 square feet to an estimated 260,000 square feet. Under the proposed plan, St. Charles Parish would maintain ownership of those facilities while Ochsner would move into a management position.
Dr. V.N. Devarajan, the hospital’s most senior physician, said he remembers what it was like before Martinez took over the hospital.
“When I came to the hospital in 1978 the hospital was two wings – it was like a tent with two wings and no good services,” he said.
He said Martinez has been instrumental in increasing hospital services, which most recently include a new emergency room and a cardiovascular wing that will allow local caregivers to provide full services for those suffering from heart problems.
“Until Fred came nothing happened to the hospital. Fred came and the hospital is today what it is,” he said.
Through the partnership, Ochnser is also planning on increasing local services.
“Our goal is to keep care local and stay local. Our goal is not to come in and take care out of the community and take it to New Orleans. Our goal is to provide care locally and expand services,” November said.
November added that Ochsner would be taking the same policies in place in their larger system and introducing them to St. Charles Parish Hospital.
“Today we have something called ‘pursuit of value’ in which we go and look at every procedure we do at the hospital and find ways to cut out unnecessary costs and to improve quality. That has had a huge impact on our financial results and I think you would see the same effort here to try and improve quality and lower the costs of procedures and to manage care more effectively so there are no unnecessary services being provided,” he said.
In addition, Hospital Service District Board Chairman John Landry said the expanded partnership opens up new avenues for the hospital.
“(Ochsner) has an insight with the federal government that when there is a new program, we will be one of the first ones to get it. Some of the other hospitals won’t that are not connected to them,” he said.
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