THE WAVE OF THE FUTURE: LSU Announces Deals For Three Charity Hospitals

It’s been a long-recognized but little-admitted fact that Louisiana can’t afford a statewide system of charity hospitals, but to date the state legislature has never entertained an honest discussion of what to do with a system costing the taxpayers more than a half-billion dollars a year in brick-and-mortar expenditures not crucial to the provision of health care for indigent patients or the training of doctors.

The old 10-hospital Charity system, currently run by LSU, is just that. Every market in Louisiana has a state-run hospital more than 90 percent of whose patient base is covered by the public sector (Medicare, Medicaid or the state’s indigent health care funds), and those hospitals soak up a large number of the state’s doctors, nurses and hospital administrators. Moreover, because those hospitals serve a nearly-unanimous public-sector patient base, they don’t even attempt to compete for business from “paying” customers – and as a result Louisiana has what can absolutely be described as a two-tiered healthcare system.

But while there are things to criticize surrounding Gov. Bobby Jindal’s administration of health policy in Louisiana, today’s announcement that three of the Charity hospitals will be moving from LSU’s control to private operations thanks to lease agreements is the beginning of a dissolution of the Charity system and a streamlining of the state’s operations.

It’s been a long time coming, and it’s a smart move. It’s a shame that to enact such a large-scale policy change Jindal had to essentially make an end run around the legislature at a time of budgetary retreat.

The operations of Louisiana State University’s public hospitals in New Orleans, Houma and Lafayette will be turned over to nonprofit corporations that run private hospitals in the three cities under outsourcing plans unveiled Monday by Gov. Bobby Jindal’s administration.

The lease arrangements were announced by Health and Hospitals Secretary Bruce Greenstein and LSU hospital chief Frank Opelka as part of an administration effort to cut state costs by turning over university-run health care services for the poor and uninsured to the private sector.

The hospitals will maintain their roles of providing safety net care for those without insurance and of training new doctors and other health care professionals, Greenstein said.

Cuts in services and hundreds of layoffs planned for January will be stalled, according to initial documents released by the LSU System, though future staffing decisions and service plans will be left to the hospital operators.

The hospitals are coming under the management of some very reputable operators. In New Orleans, the Louisiana Children’s Medical Center, the people who run Touro Infirmary and Children’s Hospital in the Crescent City, will be taking over “Big Charity.” In Houma, Ochsner Health System and Terrebonne General Medical Center will take over management of the L.J. Chabert Medical Center. And in Lafayette, Lafayette General Health System will operate the University Medical Center.

Word has it there will be move lease agreements like these in the offing. Jindal has already outsourced the Charity operation in Baton Rouge, namely Earl K. Long Hospital, to Our Lady of the Lake Hospital in town. And the six remaining Charity campuses (in Bogalusa, Hammond, Lake Charles, Shreveport, Monroe and Pineville) will similarly come under the management of other private hospital administrators.

By doing this, the state will be able to offset some of the $300 million in budget cuts which had to be made when Congress slashed its Medicaid payments to the state; instead of having to make further cuts Louisiana will actually realize $30 million in “milestone” lease payments from the new lessees. It’s also the best chance to avoid massive layoffs at the facilities in question, although the effect of those layoffs has been largely oversold since there are shortages of doctors and nurses in Louisiana and elsewhere.

Naturally, the Left will go bananas over this plan. It will be derided as selling out the people of Louisiana to “greedy corporations” (mostly by folks who have private insurance and use the very facilities those “greedy corporations” operate in the towns in which they live rather than the LSU hospitals) and nit-picked to death before it’s voted on by the LSU Board of Supervisors (that vote will come on Friday) and the budget committees in the House and Senate.

But it’s highly likely the plan will sail through to approval. The vast majority of the state’s political class, at least on the Republican side, has quietly wanted to dismantle the Charity system for a long time – even though to actually propose a change in Charity healthcare delivery has been far beyond their courage. But Jindal has found a way to do this without shutting down hospitals or a pitched battle in the legislature, and as an exercise in political tactics it’s a masterstroke.

Personally, I wish we would have had this battle during a legislative session and gotten some of the more suspect leges on the record as to their position on privatizing the Charity system. It’s a good litmus test as to the “conservatism” of some of our more newly-minted “Republicans” in the House and Senate. But this is the next-best thing, and it offers a real possibility of doing away with the largest vestige of Longite socialism in Louisiana.

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