It Doesn’t Look Like North Louisiana Is Too Happy With JBE’s Medicaid Expansion

A couple of items we didn’t get to last week paint a picture our governor probably would like Louisiana not to see, as the Law of Unintended Consequences takes its toll on John Bel Edwards’ decision to expand Medicaid in the state.

First, there are layoffs at Shreveport’s largest hospital

Over 200 people are preparing to lose their jobs at Willis Knighton in the coming months.

55 people have already lost their jobs because of Medicaid, the company claims.

In a media statement, Willis Knighton says the state’s expansion of Medicaid without adequate funding has resulted in an approximately 40 percent increase in unfunded costs from last year.

Another 177 job positions will be eliminated over time.

This was Willis-Knighton’s press statement

First, and most important, we regret having to take this action, and we commit our support to the affected workers.

This difficult decision was unavoidable because of the rapid expansion by the state of Medicaid coverage without adequate state funding to support that expansion. This has caused problems for many hospitals, and for Willis-Knighton, one of the largest providers of services to Medicaid patients in the state, it has resulted in an approximately 40 percent increase in unfunded costs from last year.

Under these circumstances, we had no choice but to reduce our staff, immediately affecting 55 current employees. Another 177 job positions will be eliminated over time through retirement and attrition.

So what’s going on here? Well, Medicaid’s reimbursement to doctors is, as everybody knows, just awful, and the paperwork doctors have to do in order to get that paltry reimbursement, is also awful. That means Medicaid patients lose doctors a fortune, which is why most of them either don’t see Medicaid patients or keep a very tight rein on the number they will see. Take a privately-owned hospital which is the largest in one of the state’s biggest markets, and now you’ve got these problems writ large. And sign up 430,000 new Medicaid patients, some of whom now show up at that hospital, and you’re drowning the folks at Willis-Knighton in red ink.

This is putting medical personnel out of jobs in Louisiana. We have a shortage of medical personnel in Louisiana to begin with.

Remember, Edwards has been crowing about how much money his Medicaid expansion has been saving the state. He can tell that to the 200 people at Willis-Knighton he put out of a job.

Here’s something else

Locked in a dispute over their state contract, leaders of the safety-net hospital operator in north Louisiana have lodged new allegations in their disagreement with state officials, accusing Gov. John Bel Edwards’ administration of discrimination in their payment formula.

Officials with BRF, the company managing the state-owned hospitals in Shreveport and Monroe as University Health System, are accusing the Edwards administration of giving better terms to the hospital operator in New Orleans.

“North Louisiana hospitals get only 32 cents per patient for every dollar received by New Orleans. We will fight for a funding model that treats the citizens of north Louisiana fairly, and provides for adequate health care for those who need it most,” Malcolm Murchison, BRF chairman, said in a statement.

BRF is seeking to hang onto its deal with the state, amid breach-of-contract accusations from the Edwards administration and LSU, whose doctors and medical students work and train at the safety-net facilities.

Edwards’ lead negotiator with the safety-net hospital operators, Commissioner of Administration Jay Dardenne, said BRF’s discrimination allegations are “false claims.” He described them as a “public relations offensive” that appeared after the company was accused of not meeting the terms of its agreement and refused to sign a reworked deal.

“I guess (they’re) trying to justify the shortcomings they’re having. But this argument about discrimination and this whole barrage of information that they have fired off in the past month or so is brand new,” Dardenne said.

To be fair, LSU has been howling about BRF ever since it got the contract to take over the state Charity Hospitals in 2013, and the Edwards administration and LSU are both accusing BRF of breaching that contract. What’s more, BRF is locked in a lawsuit with Willis-Knighton over what it says was interference by the big hospital in its negotiations with Ochsner to enter into its deal with the state; everybody seems to think getting the Ochsner deal done would alleviate a lot of the problems they’re having with BRF and those two hospitals in Shreveport and Monroe.

The point being that Edwards’ Medicaid expansion is making everything worse for these hospitals. There isn’t enough money to fund 430,000 Medicaid patients flowing through the doors, and you’re seeing how they’re dealing with that reality. One hospital is laying people off left and right, and the other is in a war with the governor over the crumbs from the pie they’re given.

This is government health care. Never enough money, never-ending politics, always at least the threat of lawsuits. And nobody can figure out exactly who’s to blame.

What could have been done was allowing the market to provide health insurance at lower cost, something admittedly Obamacare made far more difficult. Even so, the state probably could have attempted to work out some sort of modified Medicaid expansion that would have differed from the old Soviet-style model on offer. Edwards didn’t have it in him to do that, so the state’s hospitals are now going to suffer for it.

Starting, obviously, in North Louisiana. But certainly not ending there.

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