Parish negotiating with Oshners on emergency, walk-in care center

Deidre Cruse, Governmental Reporter

Iberville Parish President J. Mitchell Ourso Jr. on Thursday signed a non-binding letter of intent to negotiate with Ochsner Health System to operate a free-standing emergency and walk-in care center in the Plaquemine area.

Ourso began talking to Ochsner after the parish's hospital consultant, Stroudwater Associates, said in its final report that the parish could afford to build an 18- to 24-bed inpatient hospital, but that operating it would be cost prohibitive, especially in the first few years.

If there is an agreement, the parish would construct the new care center and lease it to Ochsners, which would be solely responsible for healthcare services and be responsible for financing its operations.

After a half-hour executive session at a special meeting Thursday night, the Iberville Parish Council authorized Ourso to go ahead with the letter of intent. He and Ochsner's officials now have until May 31 to complete an agreement on the size of the facility the parish would build, the scope of services to be offered and the number of employees who would staff the center.

The Ourso administration did not disclose the terms of the letter of intent, as is allowed by state law, but the terms of any agreement will be made public, said Chief Administrative Officer Edward A. “Lucky” Songy Jr.

The Louisiana Office of community Development-Disaster Recovery Unit would have to approve parish expenditures for buying property, constructing and equipping the new facility.

Iberville has been without a hospital since May 2009, when a bankruptcy court forced River West Medical Center to shut down. The parish's attempt to revive the River West Facility failed when the group of local physicians who bought the property refused to sell it for an appraised price they thought too low. By law, the parish could not offer more.

Last year, at Ourso's recommendation, the Parish Council agreed to set aside $21.6 million of its federal Hurricane Gustav funds to build a small, new hospital for the parish, and hired Stroudwater to conduct a study on whether the facility would be feasible.

“We've worked long and hard to explore all the options and come up with solid and sustainable healthcare, especially emergency healthcare for our residents,” Ourso said in a prepared statement. “I am very pleased to be able to announce that tremendous progress is being made on this very ambitious and difficult goal.”

The parish council backed the latest idea in an 11-0 vote, with councilmen Salaris Butler of Seymourville and Howard Oubre Jr. of Plaquemine abstaining.

In my opinion, Mr. Oubre and Mr. Butler voted for no hospital here,” the parish president said. “...They should be ashamed of themselves.”

The parish recently hired a new consultant with long experience here to review the Stroudwater report and to represent the parish in negotiations with Ochsner.

Robert E. Galloway of Galloway Consulting of St. Petersburg, Florida, presented Stroudwater's findings to the council last week.

In summary, Stroudwater found:

– Significant community support for a new healthcare facility here and a strong preference for it to be affiliated with a “larger clinical partner.”

– Market demand studies show the parish could support a small, 69,000-square-foot inpatient facility that included emergency, diagnostic, treatment and support services.

– Construction costs would be around $20 million, but projected overall costs of the facility would be some $34 million, not counting land or financing.

Hospitals generally lose money during their start-up periods. Stroudwater projected losses of $7 million in the first year, $4.4 million in the second and some $2 million a year after the start-up period.

The parish's large number of uninsured residents – 23 percent – factored into the losses. According to the report, only 32 percent of residents are covered by commercial insurance, while 17 percent are covered by Medicare and 28 percent by Medicaid.

“Without reductions in uncompensated care, the hospital is projected to lose approximately $2 million per year once full annual volume levels are achieved,” Stroudwater said.

When coverage is expanded to more of the uninsured under the Patient Protection and Affordable Care Act, the losses annual losses would still be some $1 million a year after the start-up period, the consultant projected.

“Even with reductions in uncompensated [care], the hospital will not have enough cash to support the losses in the start-up period,” Stroudwater concluded.

Stroudwater also reported that, since River West Closed, Acadian Ambulance has carried between 12 and 15 patients a day to Baton  Rouge hospitals, 30 percent of them for emergency care. AirMed services had carried another six to eight patients a month to Baton Rouge.

First responders reported a significant increase in 911 calls for non-emergency situations, and turn-around time for the four Acadian ambulances serving the parish has been “constrained.”

Some areas, such as Bayou Pigeon and Bayou Sorrel, are affected by significantly longer travel distances to a hospital, the consultant said.