Rough cuts to LSU hospitals
Even more so than political corruption, what has set Louisiana apart from other states is its extensive network of state-run charity hospitals. Some would say that for this state to do anything that others do not is a compelling reason to stop it right now. Many other people value the mission of the university hospitals, where resident doctors and dedicated staffs care for those with nowhere else to go. For some of the latter, compassion is mixed with the desire not to see the huddled masses crowding into the private and community hospitals they use.
Regardless of how the LSU-run system of public hospitals is viewed, the recently announced reduction of services and employees marks the beginning of its end. The ten healthcare facilities might remain, with residency programs in some of them, but who owns or operates each, offering which services, will be determined during the transition year that began this week.
Gov. Bobby Jindal, for as long as he is governor, will preside over the largest transformation in state government in generations. Yet this change is brought about not by him, but by Congress, which last month slashed the state's Medicaid program, with the promise of more cuts to come.
There is no evidence that Jindal tried to change the minds of the Republican House leadership. He may have found it hard to argue against Congress correcting a previous drafting error that caused Louisiana to be overpaid. Or maybe, for the sake of his national audience, he did not want to be seen pleading for more Medicaid money. After all, days later, he would say he would not accept the optional expansion of Medicaid in 2014, despite that the federal government would pay for all of it for three years, and 90 percent after that.
Once the cuts came down from Washington, causing an $859 million shortfall, inevitably the axe fell hardest on LSU Hospitals, which took a $322 million cut, a quarter of its state funding. Locals and legislators had visions of service cutbacks so severe that lines would run out of the emergency-room doors of their private and community hospitals.
Not yet. Releasing its plan last week, LSU was able to spare 80 percent of the losses this year by diverting one-time funds that were to be used to recruit doctors, buy equipment and pay bills. It managed to not close any hospitals or make massive layoffs, but it is only buying time for the reckoning to come.
Big questions loom at both ends of the state. The LSU Health Sciences Center Shreveport is the strongest of the system, with broad community support and a good mix of insured patients. But that only makes it the most attractive acquisition target for a national hospital corporation.
Coming out of the ground in New Orleans, the $1.1 billion University Medical Center needs a revised business plan. The current one substantially counts on the revenue stream from expanded Medicaid, which the governor doesn't want. While, technically, it won't be a public hospital when it opens in 2015, UMC will rely on state subsidies of over $100 million per year, now likely to go up.
In between those two, the fate of the rest of state hospitals is clouded and gloomy. For any to be sold, leased or cut 35% in funding would require the approval of the Legislature. It largely has been left out of the action so far, but when asked to ratify administration plans, lawmakers might have no choice.
Some institutions could partner with local hospitals or be sold or leased to companies, with whom the state would contract to treat patients at less than the cost to run its own hospitals. In some areas, local communities might step up to try to save a facility, like a local movement forming in St. Tammany Parish to address the closure of the state mental hospital in Mandeville. Maintaining some outpatient services is one thing, but for any community to try to operate an in-patient hospital and emergency room could require raising taxes—where civic spirit often stops.
With big changes unavoidable, the challenge for the governor, through his minions at LSU and in the Legislature, is to get it right, or to not make things worse, even as he promises again to do more with less.
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