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Sale of struggling Louisiana public hospital more likely than lease, sources say

An outright sale of East Jefferson General Hospital has emerged as the favored option in partnership discussions between New Orleans-based LCMC Health and the Metairie, La.-based public hospital, according to people familiar with the negotiations cited by NOLA.com

The partnership talks, which began in April, have explored various strategic partnerships that would allow LCMC Health to operate the financially strapped public hospital. 

Many in the community expected the partnership to be similar to LCMC Health's other deal in the hospital's service district, Jefferson Parish Hospital Service District No. 2. LCMC has a 45-year lease of Marrero, La.-based West Jefferson Medical Center for $500 million. However, the sources said the parties are headed toward a sale instead of a lease agreement.

If the East Jefferson hospital is sold to LCMC, voters in the service district would need to approve the transaction. 

East Jefferson General is the only standalone hospital in the area and has struggled to compete in an increasingly consolidated healthcare market. 

The hospital now is more than $140 million in debt and continues to lose millions each year. While leaders have said they are current on their debt payments, the hospital is likely headed for insolvency, according to the report. 

Council members of the hospital's service district have been trying to find a company to operate the hospital since 2013. It attempted to form partnerships with Nashville, Tenn.-based HCA Healthcare and New Orleans-based Ochsner Health System, but those negotiations failed. 

Read the full report here. 

More articles on healthcare industry transactions:

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For-profit hospital M&A update: 15 deals involving CHS, Tenet, HCA and Quorum
CommonSpirit divests KentuckyOne Health

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