Saving Southeast Hospital: How to Retain Vital Services Without Tax Increases

The 2012 Louisiana Legislative Session had recently ended when I received a disturbing phone message at 1:45 PM on a Friday. The message was from a Department of Health and Hospitals (DHH) staff member and stated that within 15 minutes or 2 PM that day, DHH would announce that Southeast Hospital, located in Mandeville, would be closed by the state due to federal budget cuts. To say this development caught me off-guard would be an understatement. In fact, the only discussion about Southeast Hospital that had come up during the entire 2012 session was with respect to legislation I was asked to handle by DHH to prohibit smoking on its grounds. Actually, we had a tough time getting the bill through and it was only after the 3rd committee hearing that were able to convince some skeptical legislators that patients were actually better off being weaned from tobacco since it actually facilitated addictive behavior and made medication more difficult to administer. Now, even before the bill had a chance to become law, the facility was going to be closed.

For those of us who grew up in New Orleans, Southeast Hospital was actually synonymous with Mandeville. If we were particularly bad, our parents would warn, “You’re going to Mandeville!” There was also a bit of history with the facility with former Governor Earl Long and Gov. Edwin Edwards sidekick Clyde Vidrine both being patients there. But more seriously, the area would be losing a mental health facility at a time when depression and suicide rates were escalating and other mental health resources already scarce.

The political and business community on the Northshore quickly banded together, which included parish officials, city of Mandeville officials, legislators, judges, the Sheriff’s office and other mental health advocacy groups to save the facility. We pointed out to DHH all of the strategic advantages of the hospital, the link with Tulane University, the 200 plus acres of pastoral setting ideal for mental and its strategic placement in the greater New Orleans areas as reasons to reconsider. I requested financial information for all the state hospitals to verify whether Southeast was as expensive as claimed. We also looked at legal options to prevent the closing.

The bad news was that the state had the power to close the hospital and was actually closing other facilities around the state. The good news was that private interest began emerging fairly quickly in taking over the facility. We began meeting with various private entities who had an interest in running the facility. Although we met with several groups, Meridian Behavioral Health System struck me as the most sincere with their pledge to retain as many services and as many jobs as possible. Although a new company, its principals and their financial partners had a long experience in healthcare facilities, including mental health hospitals. They also seemed to really care about patients and even investing in the facility.

Understandably, the Southeast employees were upset at the developments and conducted a visible and persistent advocacy effort. I spoke to many Southeast employees and conveyed my thoughts that a private option was probably the only viable solution. I didn’t change my opinion when an effort was launched to convene a special session to address the health care cuts. The cuts were in the $800 million range and frankly causing pain all over the state. Due to the constitutional limitations, the only areas that can be cut by the legislature are limited to health care and higher education. Higher education has been cut significantly the last few years and I certainly wasn’t going to recommend further crippling Southeastern University or any other college for that matter. It was just a very bad situation and I also wasn’t going to vote for $800 million in new taxes on citizens. So that is why I opposed the special session, to the chagrin of the Southeast employees were understandably looking for hope in any form.

The Southeast employees then decided to demonstrate in front of my legislative office, which is located at the Mandeville trailhead, on a Saturday morning. I stopped by and invited them in for coffee and doughnuts after they finished picketing. At our meeting, I tried to explain to them again that a special session had virtually no chance of success and asked if they would at least consider meeting with the Meridian people. I hosted a lunch later that week between the Southeast employees and Meridian and it seemed to go fairly well. Shortly thereafter Meridian was chosen to run the facility by DHH and the contract later finalized. This was a very complicated process and I know that St. Tammany Parish Pres. Pat Brister and her staff and DHH Deputy Secretary Kathy Kleibert and her staff in addition to the Meridian representatives Wes Mason and Dawn Steinberg worked very hard.

Now I know not everyone is not happy with the arrangement. But I think the bottom line is that we all did the best we could with what we had. Everyone has been suffering over these years with a bad economy and raising taxes was not a viable option. The private provider was not a perfect solution for everyone, but it did keep the hospital open.

I think it is interesting to contrast our approach with the gridlock currently taking place on a federal level. As far as I can tell the Democrats are demanding tax hikes being necessary for any spending cuts or else there is the fiscal cliff. However, like was done with Southeast, it is possible to avoid tax hikes and the fiscal cliff, if you can be a bit creative with spending cuts.

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