JP public hospitals expected to select different private partners


Posted on April 2, 2014 at 8:45 AM

Updated Thursday, Apr 3 at 7:08 AM

Paul Murphy / Eyewitness News
Email: | Twitter: @pmurphywwl

JEFFERSON, La. -- Mergers and acquisitions consultant Joshua Nemzoff told members of the Jefferson Parish Council that HCA withdrawing from the race to run the parish's two public hospitals leaves more than $400 million on the table.

Nemzoff spent the past two months studying all three final proposals.

"Whether you take both hospitals or the individual hospitals, whether you take transaction value, whether you take net proceeds, the HCA bids are approximately double the other bids," said Nemzoff.

Nemzoff also said the other two suitors, Louisiana Children's Medical Center (LCMC) and Ochsner Medical Center, do not have the financial backing to lease both hospitals.

"They both have somewhat challenged credits and it's a very expensive proposition to lease both hospitals," said Nemzoff. "I just don't think they can afford it."

East Jefferson General Hospital chairman Newell Normand said the Nemzoff report validates his board's decision to push for HCA.

"From a monetary standpoint, from a quality standpoint, from a managerial standpoint, from a capacity breadth and depth standpoint HCA, their bid is far superior," said Normand.

Normand also said there is no indication HCA wants back in the race.

"What I know based on some communications with HCA over the past probably six days, that there's not a desire on their part to come back in. They have been looking at other deals. I think other deals came to them in the aftermath of them withdrawing from our deal."

Ochsner is only expressing interest in East Jefferson.

"We have put in a proposal to lease East Jeff and if the board agrees to proceed, we look forward to the opportunity to enter into due diligence and possibly lease that facility," said Ochsner CEO David Gaines.

Children's is still interested in West Jefferson.

"We remain committed to Jefferson Parish," said LCMC President & COO Greg Fiern.

Fern also took issue with Nemzoff's assessment that LCMC doesn't have the money reserves to lease both hospitals.

"We do," he said.

Wednesday, council members gave each hospital board the ability to negotiate their own deal with the suitor their choice. That would likely split the $1 billion, 50-year management contract.

"Hopefully, within the next 60 to 90 days, you'll actually see someone in there operating these hospitals," said JP Councilman Ben Zahn.

Both East and West Jefferson are now expected to give JP Council members their choice for a hospital partner at their regular public meeting next Wednesday.