And how much federal tax money will have been pissed away on construction that will never fetch more than 20 cents on the dollar in the real estate market.
Lafontaine: Selling hospital is ‘not viable’ ~ Dwayne Bremer
Last month, a consultant told the Hancock County Hospital Board that he believed HMC was worth between $14 million to $22 million.
Hancock County Board of Supervisors President Blaine Lafontaine said Friday that he believes that number is “very low.”
According to Lafontaine, HMC received much more than $22 million from the federal government to rebuild the hospital.
“I don’t have the exact figures, but it could be between $80 million to $100 million,” Lafontaine said. “Selling the hospital is not a viable option at this time. Our conversation needs to be on how to enhance the hospital.”
The truth is $14 million may be too high when you factor in the consistency of the 15% operating losses which can’t be sustained unless one subscribes to the Mayor Fillingame theory of economics. Further, any valuation that is a function of earnings or cash flow indicate a money losing business is worth exactly zero. Worse is the fact the supervisors are fooling themselves thinking the problem can be solved by growing the population of the county.
Phillips said research shows that Hancock Medical has made several improvements under Ochsner, but it is still operating at a 15 percent operating loss per year.
Lafontaine said he believes the hospital has made improvements and there is additional room for improvement.
One area of optimism, he said, is that Hancock County has been experiencing a tremendous amount of residential growth.
Readers of Slabbed, having been through our coverage of the Singing River Hospital Meltdown and the long term lease process of one of the two Jefferson Parish Public Hospitals, understand the economic headwinds facing Hancock Medical Center derive from the Affordable Care Act, which is forcing consolidation in several areas of the health care sector of the economy including Hospitals. In business slang, you either merge or die. What is happening in Hancock County is not unique despite what the locals may think and unless the Supervisors are willing to begin levying taxes to support a money losing Hospital only bankruptcy can forestall the inevitable.
Finally the number one complaint I’ve heard out of the hospital involve the number of politically connected employees that still over staff certain areas of the operations. I get the feeling though that even if every deadhead position were eliminated, the Hospital would still lose money.
The bottom line is there is no quick fix to this problem. If the Sups did some homework I think they’ll end up in the same place locales like Jefferson Parish did and will negotiate a long term lease with a qualified Hospital operator. The partnership with Ochsner gives everyone in Hancock County access to one of the finest health care systems in this area. I’d personally carefully weigh my options before torching that business relationship.