After months of pressure for Prevost Memorial Hospital officials to be more responsive to the community’s health-care needs, the Ascension Parish Council plans to consider Tuesday night whether to replace the Donaldsonville hospital’s five-member board over alleged financial mismanagement.
The hospital has faced calls from the Sunrise Community Group for a new hospital building and criticism for sitting on millions in cash while making other financial decisions that, the critics say, haven’t served the public in Donaldsonville, a community with a nearly 47% poverty rate and poor health outcomes.
Responding to those calls, the Parish Council has already created a special task force of experts and community members to determine how best to deliver health care to the west bank.
The council also had a tense meeting with the hospital board’s lawyers and some of its leadership earlier this month in Donaldsonville over the hospital’s annual budget after officials had failed to make a requested presentation at an earlier public meeting in Gonzales.
Among the several items raised in a proposed resolution to remove the leadership, the Parish Council focused, in part, on the hospital’s decision in 2020 to buy a Donaldsonville clinic building and additional land for $900,000 from a company in which two of its board members have ownership interests.
When the hospital board agreed to finalize the purchase in November 2020, the board also authorized the signature of a seven-year agreement to lease the building at 214 Clinic Drive to Our Lady of the Lake Physicians Group, parish land records show.
Drs. Michael Y. Hirsch and Glenn Schexnayder, the hospital board members, still work with that physician’s group and hold physicians’ hours in the building now owned and maintained at the cost of the public hospital.
Vince Cataldo, the longtime administrator, called the purchase an innocent and legal deal that happened when Hirsch’s and Schexnayder’s other partner wanted to retire. Cataldo argued doctors offices are bought all the time by private hospitals.
Across the street from the 25-bed hospital, the building is also in Donaldsonville’s medical corridor and provides needed office space, Cataldo said.
“Sooner or later, I’m (going to) have to have my own doctors,” Cataldo said. “And where am I going to put them?”
Hirsch and Schexnayder didn’t return calls for comment left at their offices or cellphones on Monday.
Generally, state ethics law bars officials who oversee public agencies from conducting transactions with them or engaging in deals with them in which they or their immediate family have a financial interest.
But Kathleen Allen, state ethics administrator, said the state law has an exemption to those conflict-of-interest rules for many public hospital districts, allowing doctors who sit on hospital boards to enter into contracts with their hospitals.
Allen said that under the law, land sales could be seen as a contract.
Councilwoman Teri Casso, who has been leading an effort to scrutinize the hospital’s management, said the sale creates an appearance of impropriety, even if it doesn’t end up violating state ethics or other laws.
While she said the hospital’s board deserves credit for keeping a hospital in Donaldsonville through the years, she said she believes they were being led into poor decisions and it is past time for a change.
“There’s a lot of self-dealing going on there, and it’s just not appropriate. It’s not what that hospital needed,” she said. “Our responsibility, frankly, as a council has been … we haven’t done what we needed to do. We should have done it years ago.”
Adding that the building sale is just one of 17 items in the council resolution also raising management concerns, Casso said pressure from residents in Donaldsonville has helped create the moment to take that overdue action.
The Parish Council has proposed replacing the hospital board with Glen Price, the leader of the Sunrise group; Tanya Mitchell, another member of the group; Chairie Mitchell-Levy, a west bank resident who already sits on the health care task force; Bill Dawson, a parish official and former west bank councilman; and Falcon Mire, a west bank lawyer.
Parish officials said those appointments would only be served temporarily until the council could re-interview for the openings. The temporary appointees could apply, however.
Though a vote has been set for 6 p.m. in Gonzales, Gray Sexton, an attorney for the hospital, said on Monday that the hospital was seeking an emergency court order to block the vote on the grounds the council made procedural missteps in calling for the board’s removal.
Other items in the resolution to remove the hospital board include that it has presented only two required annual budgets in eight years for council approval, accrued investment losses totaling $1.8 million between 2013 and 2022, and has a board member who does not live on the west bank, as the law requires.
The resolution also details some of the hospital’s latest audit findings, including the conclusion that the hospital doesn’t have “adequate policies, procedures, and internal controls to prepare accurate and complete financial statements.”
“Due to the inaccuracy of the information provided to the Board, the District may not have the ability to make appropriate financial decisions,” according to the council resolution’s paraphrase of the 2022 audit.
Chase Melancon, the council chairman, said among the last straws for him was the hospital’s budget presentation on Nov. 3.
Sexton, the board lawyer, took notes on council questions as a hospital board member and the hospital chief financial officer offered a handful of answers about the board’s budget. Cataldo, as he had been for the several prior meetings, was absent. Sexton promised to provide answers at a later date.
Melancon said the board has thumbed its nose at recommendations to improve and, for months, Donaldsonville residents who aren’t connected to the hospital have been telling him they aren’t happy.
“I haven’t had a single Donaldsonville resident speak in favor of how Prevost is run and that the services are up to their standards,” he said.
In the council resolution to remove the hospital board members, the council notes the board had received a $625,000 appraisal for the building but bought it at a 40% premium.
But hospital officials say they got another appraisal for $1 million.
State attorney general’s office opinions have said public purchases of property above the appraised price constitute an illegal donation, though Ascension Parish lawyers have said in the past that the law allows some wiggle room of up to 10% above the appraisal.
In Louisiana, state attorney general opinions are advisory. They are not binding.