Group makes offer to hospital
In an unexpected move to many in attendance, a Lafayette management firm attended the first regular meeting of the Vermilion Parish Police Jury for July with the intention to make a proposal to lease Abbeville General Hospital.
Acadiana Management Group CEO, August Rantz III told the group that he was contacted by some members of the jury who asked his company to attend the regular meeting to discuss their proposal.
The proposal, according to Rantz, is $250,000 for the facilities and $250,000 for exclusive use of and running the facility.
“We understand there is tax money being used now to support the hospital. In our proposal,” Rantz stated, “we would no longer need tax dollars.”
Rantz credited the ability to run the hospital without tax dollars is based on the economies of scale to be able to manage it.
Jury President Gerald Butaud asked Rantz if his company had brought the proposal before the hospital board.
“No, we haven’t. We are on the agenda for the meeting on the 28th,” he answered.
While it is true that the management company has been in contact with the hospital, members of the board did not see the proposal that was presented to the jury, prior to the event.
As it turns out, the step taken by Rantz and his company was an overstep in the process to negotiate a contract.
Legal counsel for the Jury, Paul Moresi III, responded to Rantz.
“All operations, assets and management of the hospital is of the taxpayers in that district and for any sale, the board would have to bring it to the taxpayers.”
That board would be where the proposal would start,” Moresi added.
Rantz responded with confusion, “We were approached by some of the jurors in order to save some finances for the people of Abbeville. That’s why we came here today.”
Members of the hospital board, their legal council and the hospital administrator, Ray Landry were in attendance.
The language in the written proposal summary stated, “It is the intent of Acadiana Management Group, LLC, in conjunction with area physician partners to revitalize and reinvent Abbeville General Hospital into a community hospital.” It was proposed to be known as Vermilion Parish Community Hospital.
Currently the ownership of the hospital is of the taxpayers. The taxpayers in Hospital District #2 will be voting on a one-half cent sales tax on July 19.
Closing his presentation, Rantz added, “There are several things, if you look at the hospital as a whole that we might be able to improve on.”
After Rantz thanked the jury for the attention to the matter, hospital board Vice-Chairman Robert LeBlanc asked Rantz a question, “is your company an LLC?”
“Yes,” Rantz answered.
LeBlanc then addressed the jury and the audience with the board’s response to the proposal.
“The hospital is worth $30 million. The problem we have with a Limited Liability Corporation is that they come to the hospital, they sign an agreement and they don’t pay their bills. Then you are stuck with recovery of everything that is going on in that hospital.”
“Abbeville General is a taxpayer owned hospital. It’s run by a board whose members are appointed by the jury, and have volunteered to look after the public interest. Why they (Acadiana Management Group, LLC) are here tonight I don’t know, but we just so happen to have a tax on July the 19.”
He continued to say, “The hospital is there not to save money but to save lives. It is to service the taxpayers of Vermilion Parish. Abbeville General doesn’t do what we do to make money. We make a tenth of a percent profit. The jury did not make the hospital to make money, but to serve the needs of the parish,” LeBlanc stated.
In a phone interview with August Rantz IV, Chief Operating Officer of the management group, the timing of the proposal was questioned.
“We have been considering this for a few months. We just found out this was viable. We can’t control when the tax is,” he stated.
“Abbeville General is a good product. We want to take that and clean it up and make it better. We are very excited at the prospect.”
According to Rantz IV the group is interested in an outright purchase of the hospital, but a lease agreement is an easier method.
“If it were a purchase, it would have to go before a vote,” he said.
The extensive proposal outlines various clauses that address potential issues with a lease. One item which called the fear of closure of the existing facility and loss of services states that “there will be a protective covenant in the operating lease to safeguard the integrity of the hospital in the event the hospital continues to have financial difficulties. In addition, the new Vermilion Parish Community Hospital Board will be made up of no fewer than 50 percent community physicians and area leaders to safeguard the provision of health services offered by the hospital and to help maintain the community focus of the hospital.”
The plan that was outlined is to be completed in three phases, bring the hospital to profitability, increase services, revenue and efficiency, construct a new hospital facility while maintaining hospital viability and attract new physician specialists and sub-specialists to provide care to the the citizens.
“We will work on a system of markers for success to determine the outcome of the project; if private dollars will be used in the future.”
According to Rantz, the maintenance of the hospital would fall upon his company.
The hospital, which employs about 300 people, has been in the process of a long-term plan.
“In 2003 the legislature granted permission to request a tax in 2008. It is the intention of the hospital to use this tax to improve the hospital and the services offered within,” LeBlanc stated.