East Jefferson General Hospital facing debt rating downgrade

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wwltv.com

Posted on March 7, 2014 at 11:11 PM

Updated Friday, Mar 7 at 11:21 PM

Tania Dall / Eyewitness News
Email: tdall@wwltv.com | Twitter: @taniadall

Later this month the Jefferson Parish Council is expected to vote on which private company it wants to see take over both East and West Jefferson hospitals. Could the long-awaited process be tainted by a Moody's financial report released on Friday saying East Jefferson hospital is in financial trouble?

"I think it shows why we need a leasing partner and we need a leasing partner quickly," said Jefferson Parish Councilman Ben Zahn.

Who will take over Jefferson Parish's two public hospitals is still up in the air.

In January, the Parish Council deferred their vote after hiring a consulting firm to review three offers to lease the hospitals.

Moody's Investors released a report saying the bond agency is looking to downgrade East Jefferson General Hospital's debt rating, citing larger-than-expected operating losses last year and a drop in cash on hand at the hospital from 162 days to 129 days in a two-year period.

Last year, the Jefferson Parish Council was looking to privatize both East Jefferson General Hospital and West Jefferson Medical Center, but the hospitals' governing boards couldn't agree on which operator to move forward with.

Jefferson Parish Councilman Ben Zahn says this latest financial report is a reflection of why the Parish Council needs to vote sooner rather than later on which private company should take over.

"There's cash on hand, there's no chance of any payments not being made, the staff is doing an excellent job at East Jefferson Hospital. But lets do something before we have a problem in the next year or so," said Zahn. He says a voted on the lease deal is likely to happen on March 19.

East Jefferson General Hospital issued this statement late Friday night: "Today Moody's, East Jefferson General Hospital's bond rating agency, informed the hospital it is on a watch list for consideration of downgrading its rating. Moody's requested additional financial information and will be meeting again in late March to make a final decision. A downgrade will not increase the hospital's monthly interest payments on its existing bonds.

"EJGH continues to have a strong cash position and is not at risk of defaulting on its bonds.

"Our 2014 budget shows significant improvement in financial performance. In addition we continue to provide high quality of care to our patients. We will continue to invest in our team members, medical staff and our facilities as we move forward," noted Mark Peters, M.D., East Jefferson's President and CEO.

"Dr. Peters continued, 'We began a search for a partner because of the rapidly changing healthcare environment. It is important that we choose the best partner who will work with us in moving forward in a positive, successful fashion." Dr. Peters added that the organization continues to work together to improve its financial performance and continue to provide the highest quality of care to patients. "These actions will stabilize and improve our bond rating. More importantly, it will allow us to prosper in our changing environment, with or without a partner." -Keith Darcey, East Jefferson General Hospital Public and Media Relations

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