LSU has pulled the plug on its contract with the private manager of its hospitals in Shreveport and Monroe, claiming breach of contract.
The deal was one of the agreements struck as Gov. Bobby Jindal moved to turn management of LSU hospitals around the state to private entities.
The Jindal administration supports LSU’s decision, according to a statement issued by the governor’s press office.
LSU served formal notice to the Biomedical Research Founding of Northwest Louisiana Foundation on Thursday, citing breach of “the public purpose” outlined in the cooperative endeavor agreement. Under that agreement, LSU said the Foundation must withdraw from it role as parent company of University Health System which operates the two north Louisiana hospitals.
The Foundation, called BRF, immediately served notice that it would challenge the move in court.
Steve Skrivanos, chairman of the University Health System Board of Directors, called the move “illegal and disruptive to the public purpose of caring for patients.”
“The facts show that by all relevant measures of quality of care, patient service and financial management, the BRF and University Health have performed much better than LSU did when it managed the hospitals,” Skrivanos said in a statement.
The action to remove BRF came after failed negotiations between LSU and the Foundation that began in early July.
The deal has been fraught with controversy from the beginning because it involved a private foundation with no experience running a hospital taking over. In addition, Foundation executive John George of Shreveport — served on the LSU Board of Supervisors as the agreement was being struck. More recently, the Foundation sued a hospital competitor accusing it of violating federal antitrust laws and trying to take away LSU-affiliated doctors and paying patients.
“We have exhausted all avenues to resolve our differences amicably and now must take action that we hoped would not be necessary,” LSU President F. King Alexander said in a statement. “We want to secure operational and financial stability through a viable partnership, so we can continue to ensure both high quality healthcare and medical education.”
LSU did not spell out specific problems that prompted the move to cancel the pact.
But earlier, LSU claimed the Foundation failed to work corroboratively with LSU; failed to support and promote LSU Health Science Center-Shreveport’s academic mission and reputation; and failed to establish a sustainable and competitive business model.
In an effort to ensure the continued operation of University Health Shreveport and University Health Conway, a new group of civic leaders will take over “to bridge the transition to a new operating partner,” LSU said.
The entity is Academic Health of North Louisiana Hospital Management Company Inc. The non-profit corporation registered with the Secretary of State’s office Wednesday. William Comegys III, a Shreveport attorney, is listed as the only officer. LSU said board members of Academic Health will be announced soon.
“Patients, hospital staff and the community at large can rest assured that the University Health hospitals will continue to operate as usual during this period,” Alexander said. “LSU pledges its continued commitment to provide unparalleled medical care in the Shreveport and Monroe communities.”
The Shreveport hospital is home to one of LSU’s medical schools.