A legal battle over governance has emerged in New Orleans' push to reopen a hospital closed by Hurricane Katrina.
Uneasy in the Big Easy
Removed hospital board members sue mayor
New Orleans Mayor Mitch Landrieu landed in court last month after he cut short the terms of six members of the 13-member Orleans Parish hospital district board. The dismissed members sued the city in August and asked a judge to return them to the board.
Last week, state court Judge Sidney Cates IV said he would not intervene to halt Landrieu's board reshuffle, but said he would rule on allegations from the former board members that their removal was illegal. Cates also denied the plaintiffs' request to freeze funds to be used for the city's nearly $16.3 million deal to buy a hospital closed by the hurricane.
Landrieu removed the hospital district's board members after Louisiana's Legislature in June passed a bill giving the mayor power to appoint and remove the hospital district board members. Landrieu vowed to bring hospital service back to east New Orleans during his first State of the City address in July, at the same time criticizing the prior administration and Universal Health Services for failing to close the deal, the New Orleans Times-Picayune newspaper reported. Landrieu appointed eight members to the board for seats and replaced his predecessor's appointees, the newspaper said.
The lawsuit did not stop the mayor's office from announcing on Aug. 20 that the city closed on the deal to acquire Pendleton Memorial Methodist Hospital from Universal Health Services, based in King of Prussia, Pa. UHS Spokeswoman Margaret Care in an e-mail confirmed that the transaction was final.
The city first announced the plans to buy Methodist Hospital in mid-2009 and said the closed facility would be reopened as an 80-bed hospital in three years.
“A top priority of our administration is opening a full-service hospital in New Orleans East as quickly as possible,” Deputy Mayor and Chief of Staff Judy Reese Morse said in a written response to the lawsuit. “To accomplish this task, the mayor has installed a new leadership team to work with us, and we are pleased to be moving forward.”
The lawsuit claims the legislation to grant Landrieu control of board appointments violated state law that bans lawmakers from attaching an unrelated amendment to a bill, said Jacqueline Goldberg, a lawyer and one of the removed board members. It also alleges the bill failed to provide adequate local notice and cannot be applied to board members appointed prior to its enactment, she said.
Alice Craft-Kerney, one of six members who sued the city, said the state law singled out the Orleans Parish hospital district but did not alter the governance of the state's other hospital districts. “To me its just suspect,” said Craft-Kerney, who founded the Lower 9th Ward Health Clinic. She also noted that the bill had support from a state senator who has since joined the mayor's office.
The Times-Picayune reported the former state senator, Ann Duplessis, “pushed a measure that eliminated term limits and (city) council confirmation” for the district board members.
Lawrence Prybil, a professor in the University of Kentucky's Health Services Management department, said the authority and responsibility of boards created to govern public hospitals varies across the country.
Public officials' control over governing boards of hospital districts is similar to power that private not-for-profit systems have over board appointments for subsidiary hospitals. And regardless of ownership or structure, Prybil argued, the best adhere to common principles of good governance.
Farzan Bharucha, a senior manager with Kurt Salmon Associates and governance consultant, said hospital district board autonomy varies and no standard has emerged for how much control elected officials can exert over board appointments. Board members may have some authority when selecting a new member, but that control will “never be 100%,” he said. “It will always include some politics.”
Bharucha and Shelley Oberlin, also a Kurt Salmon senior manager, in a 2009 analysis for the California HealthCare Foundation of the state's public hospitals, found a recent shift toward models that lessen the government's grip on governance
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