Jefferson Parish's public hospitals are fighting for their lives in the fast-paced competitive health care market, and looming federal requirements along with shrinking government reimbursements will exacerbate the institutions' financial woes, according to West Jefferson Medical Center's chief executive officer. That is why legislation allowing West Jefferson in Marrero and its sibling, East Jefferson General Hospital in Metairie, to...
Jefferson Parish's public hospitals are fighting for their lives in the fast-paced competitive health care market, and looming federal requirements along with shrinking government reimbursements will exacerbate the institutions' financial woes, according to West Jefferson Medical Center's chief executive officer. That is why legislation allowing West Jefferson in Marrero and its sibling, East Jefferson General Hospital in Metairie, to be leased without a voter referendum provides an expedient opportunity for security with a larger, more stable entity, Chief Executive Officer Nancy Cassagne said.
"We have to figure out how to navigate the new landscape, the new playbook of health care,'' she said Thursday.
Cassagne and Chip Cahill, president of the West Jefferson hospital board, made their case to about 50 people in the second public meeting on the issue this week. Dr. Mark Peters, East Jefferson chief executive, and Sheriff Newell Normand, president of the EJGH board, made a similar presentation Tuesday.
The hospitals want support for House Bill 383, which would allow them to enter into lease agreements without a vote. A provision requiring a public referendum for sale of the hospitals would be left intact. The House has approved the measure, and Cassagne said the Senate is set to consider it next week.
Cassagne said the financial pressures will come from the Affordable Health Care Act, which emphasizes preventative care and keeping people out of the hospital, and from declining federal reimbursements. About 66 percent of West Jefferson's patients rely on Medicaid and Medicare, which is paid at set rates, she said.
"We're at their mercy. That's the reason we're struggling to survive,'' she said, adding that the rates are non-negotiable.
Meanwhile, the number of patients using private insurance is flat and is not expected to grow, she said. "That's a big problem,'' Cassagne said.
And although the West Bank hospital broke even in 2012, it faces a $4 million hole in 2014 because of the federal government's sequestration -- budget cuts that were imposed in March, Cassagne said. That amount does not include what could be further reductions in Medicare and Medicaid reimbursements, she said.
Meanwhile, the expense of maintaining a 53-year-old hospital and providing current technology to enable its doctors to give the best care continues to rise. The hospital's capital budget for projects and expenses is about $16 million to $18 million annually.
That's why the hospital needs a larger institution with deeper pockets to draw from, Cahill said. "We can't survive as a stand-alone hospital,'' he said.
Cassagne explained the need to pursue the strategy, stressing that time is critical, because hospital corporations around the region are negotiating partnerships. Cassagne said the Jefferson hospitals' governing boards have pledged that employees, as well as their retirement benefits, must be retained. In addition, the leaseholder would absorb hospital debt and other liabilities.
Hospital officials want to find the best fit for the institutions to maintain their identity, Cassagne said.
Seventy-one percent of the hospital's 2,000 employees live on the West Bank.
"We don't want to lose the ability to pick the partnership that will be best for our medical staff, best for our community,'' she said. "We need to make sure we take care of our own.''
Among those supporting HB 383 are the Jefferson Parish Medical Society, the West Jefferson Medical staff and its hospital auxiliary, the Harvey Canal Industrial Association, the Jefferson Business Council and JEDCO.