Southpark in financial trouble, PHI pilots call off strike and more
STOPPING THE BLEEDING
Local health care sources say Southpark Community Hospital is in financial trouble and considering options that may include shuttering the year old south Lafayette Parish hospital.
Backed by 41 investors, including 37 local doctors, the acute care hospital opened in August 2005 and within several months was struggling financially. At that time, Pacer Health Corp. of Miami acquired a majority interest in the 54,000-square-foot facility, according to Pacer Chief Executive Officer Ray Gonzalez. In addition to its 60 percent stake, Pacer ' an owner-operator of acute care hospitals, medical treatment centers and psychiatric care facilities ' assumed management of the hospital's operations. "We're a turnaround company," Gonzalez tells The Independent Weekly. He says Pacer invested $3 million in the troubled facility, and another source close to the physicians says the hospital has made at least one cash call to its investors.
Several weeks ago, publicly traded Pacer checked out of the hospital, selling its interest to Southpark Holdings II LLC, a local group Gonzalez says is led by Dr. Maximo Lamarche, an internist/nephrologist and Southpark hospital's chairman of the board. Lamarche also is one of the hospital's founders. The Louisiana Secretary of State's office lists Southpark Holdings II's manager as James H. Morgan, whom sources say is an investor who has served as administrator of Southpark Community Hospital.
The sale was valued at $3 million, $2 million for the 60 percent interest in the hospital, located at 314 Youngsville Highway, and $1 million for the value of the management agreement. It's structured in two $1.5 million notes, with the first payment of $250,000 due in about a week.
Southpark hospital's officials and investors, including Lamarche, did not return numerous phone calls seeking comment.
Gonzalez claims his company successfully restructured Southpark's operating procedures and improved the quality of patient care. Pacer turned over management to Southpark Holdings II about a month before the sale.
That's when Southpark hospital turned to Acadiana Management Group, a local owner-operator of health care facilities and a specialist in physician partnerships. "We came in on an interim basis to do an analysis only," says Gus Rantz, AMG's chief operating officer. Rantz says AMG took over the facility's management for a month, including paying its bills, though he would not discuss his group's recommendations to the hospital's board.
Gonzalez says the facility had its best month ever in October (when AMG was managing it). "It would be sad [if it closes]," he says, "because the month of October it had $1.2 million in collections." Gonzalez calls that figure the break-even point the hospital was working toward. "All the numbers were trending in the right direction," he notes.
Southpark, which primarily serves residents in south Lafayette Parish, offers comprehensive acute care services, including outpatient and inpatient surgery, radiology services and a 24-hour laboratory. It has 20 acute care beds, 16 observation/post-anaesthesia care units and three technologically advanced surgical suites.
Sources blame construction overruns coupled with hurricanes Katrina and Rita ' the hospital cared for many indigent patients in the wake of the storms ' for the facility's rocky start, but neither Gonzalez nor Rantz believe the group of physician owners will close the hospital.
"I don't think they're actively exploring closure," Rantz says. "There's a lot of excitement about the hospital still. It's a very viable entity. It's just a matter of getting the right mix of community support, patient awareness and physicians working together." ' Leslie Turk
PHI PILOTS CALL OFF STRIKE
Unionized pilots, on strike since September in a bitter labor contract dispute with Petroleum Helicopters Inc., have called off their pickets and issued an "unconditional offer" to company officials to return to work immediately ("Walk the Line," Oct. 25). Melvin Schwarzwald, a union attorney based in Ohio, says under the Railway Labor Act, which governs the company-union negotiations, PHI is now required to return striking pilots to work in open positions in order of their seniority. The offer was delivered to PHI at 4 p.m. Friday, Nov. 10, but the company had not responded to the gesture by press time Monday.
PHI Chief Administrative Officer Richard Rovinelli could not be reached for comment Monday morning.
"People are prepared to return to work," Schwarzwald says. "But they're waiting to hear from the company as to when they should report."
"Under the law, this should happen smoothly," he adds. "But we'll see what the company's attitude is and how the company performs. They have legal obligations, and we trust that they will meet them."
At a Metairie meeting Friday, pilot union members voted overwhelmingly to return to work. Schwarzwald says the shift in strategy comes as a result of PHI's continuing reluctance to re-enter negotiations. "Our thought is that we would return to work and that would put us in a stronger position to negotiate with them," he says. "And they are required to negotiate with us. We thought that was a better strategy now to get a new agreement."
PHI, headquartered in Lafayette, is one of the largest helicopter transport providers in the country, primarily servicing the petroleum and medical industries in 16 states.
Pilots began their strike Sept. 20 following more than two years of failed contract negotiations with PHI. The pilots reached an impasse with company officials regarding several working conditions, including vacation, mandatory overtime and retroactive pay increases. The union's previous contract with PHI expired in 2004.
Since the strike began, PHI has declined offers from both pilots and the National Mediation Board to continue negotiations with pilots. It also has been giving lucrative bonuses to retain and recruit new pilots.
In its Nov. 9 third quarter earnings report, PHI indicated that it had survived the worst of the strike. Out of a total pilot workforce of 564, PHI claims 237 went on strike in September, a number that dropped to 176 by last week, with 42 pilots having returned to work or taken jobs elsewhere. Due to aggressive recruitment of new pilots in the past three months, PHI says less than half of the initial 237 positions it lost to the strike are unfilled.
PHI also reported that third quarter net earnings dropped 7 percent, falling from $5.5 million on operating revenues of $100 million in the third quarter 2005 to $5.1 million on operating revenues of $109.3 million in the most recent quarter. The company estimates the strike cost it $3 million in revenue for the quarter ending Sept. 30, in addition to $900,000 in other costs. In the same report, PHI states that "the negative effects of the strike diminished in October, and we expect it to continue to diminish in future months." ' Nathan Stubbs
SAVE THE HORSE FARM'S SIGN-UP
The community activist group Save the Horse Farm is holding a petition drive to show public support for Lafayette Consolidated Government's potential purchase of the historic site to preserve it as green space. The group formed last year to prevent commercial development of UL Lafayette's 100-acre horse farm on Johnston Street, part of a controversial land swap deal UL President Ray Authement called off in mid-June ("Cover Up," Sept. 27, 2006).
The petition can be signed online at www.savethehorsefarm.com, in writing at Artmosphere on Johnston Street (you must ask for it), EuroBreads on Gloria Switch Road, Mello Joy Café downtown and Oil Center Health Foods. The signatures will be used to encourage UL's administration to grant local government first right of refusal on the property for a year. The group hopes local government will acquire the property and eventually convert it into a public park.
For more information, call Danica Adams at 845-4141 or Jason Faulk at 254-0684. The drive began in early November and ends Monday, Dec. 4. Save the Horse Farm representatives will present their findings to the City-Parish Council in December. ' LT
ROAD HOME FOR THE FISHERIES?
The Louisiana Fishing Community Recovery Coalition, an industry group consisting of commercial and recreational interests, has managed to receive a $20 million commitment for its "Back to the Dock" program. The Louisiana Recovery Authority, the governor's super-agency hypothetically guiding the state's recovery, is being asked to oversee and fund the new program that's the fishery equivalent to "Road Home," which is responsible for administering federal housing money. "The fishing communities are not looking for a hand out, but for a hand up to enable them to return to work and provide quality seafood products to the American consumer," says Mike Voisin, president of the Louisiana Oyster Task Force.
The LRA would be charged with developing the program, if it's even taken up, but supporters already have strong arguments. Members of the coalition are now building a message rooted firmly in one of the state's favorite buzz phrases: economic development. According to data compiled by the state Department of Wildlife and Fisheries, Louisiana's pre-storm fisheries sectors contributed a total economic benefit to the state exceeding $3.3 billion. They supported more than 36,000 jobs, generated more than $100 million in state sales tax and created in excess of $23 million in state income tax. Damages from Rita and Katrina on Louisiana's fisheries are estimated at nearly $582 million. Losses include commercial fishing vessels, recreational boats, seafood processing facilities and wholesaling plants. This mammoth figure, however, does not include damage to docks or marinas. The LRA is scheduled to make its final decision Dec. 15. ' Jeremy Alford
A GAME ABOUT 'THE GAME'
Do you love playing fantasy football but find there's not enough double-crossing, back stabbing and male pages? Then FantasyCongress.com is where you need to be. As in other fantasy sports, you ' "the Citizen" ' draft a team of real-life legislators from Congress and score points for your team's successes. You can bench lawmakers or move others into the line up, based on the upcoming week of legislation. But be careful who you pick. From Louisiana, Rep. Bobby Jindal, a Kenner Republican, tops the rookie list, while Rep. Charles Boustany, another GOP member from Lafayette, fills spot No. 10. Reps. Charlie Melancon, a Democrat from Napoleonville, and Rodney Alexander, a Quitman Republican, fall near the bottom of the 147-person field. The rest of the gang members in the lower chamber, as expected, are still big players. In the Senate, both Sens. Mary Landrieu, a New Orleans Democrat, and David Vitter, a Metairie Republican, are in the top 10 ' but it's the sub-category of "lower senators." Just imagine the potential thrills from a video-game version filled with authentic filibusters. ' JA