Legislators cleared the way Friday for construction to begin on a $1.1 billion New Orleans academic medical center.
The approval of the University Medical Center’s financial plan by the Joint Legislative Committee on the Budget came after six years of squabbling among state officials on the details of a new facility to replace the charity hospital badly damaged by Hurricane Katrina.
The hospital is expected to open in 2015.
University Medical Center Management Corp. board member Elaine Abell said the hospital will treat patients, as well as train future doctors.
“(It will be a) doctor factory to give us physicians who will stay in Louisiana,” she said.
The private LSU-aligned corporation is charged in state law with financing construction and operating the medical center. The corporation presented the business plan for budget committee approval.
The 424-bed hospital backed by Gov. Bobby Jindal will serve Medicare, Medicaid and uninsured patients as well as those with private insurance.
The state contributed $300 million toward the hospital’s cost. The rest of the funding is coming from federal hurricane recovery dollars and other sources.
Jindal said in a prepared statement that the hospital will be a teaching facility, a health-care provider and “a vehicle for increased research and development and more economic development.”
He said the business plan lowers construction costs and reduces the state’s annual expenses.
LSU System President John Lombardi characterized the hospital’s construction as key to research and graduate medical education.
State Rep. Bodi White, R-Central, thanked hospital officials for bringing down the construction costs.
“We had trouble coming up with that $300 million,” he said.
White said the hospital will be an economic engine that also will save lives.
State Sen. Gerald Long, R-Winnfield, questioned whether the new hospital will have an impact in north and central Louisiana.
Abell drew laughter when she described herself as a Lafayette resident whose parents came from Shreveport and Alexandria. She said there is the possibility that patients will come to the hospital from across Louisiana for treatment.
“I look at it as a referral hospital for hospitals in Lafayette, Houma and all along the I-49 corridor,” she said.
State Rep. Walt Leger III, D-New Orleans, said costs were reduced by 11 percent for the final hospital business plan.
“Every member of this committee should be pleased,” he said.
Not everyone is on board with the new hospital.
State Treasurer John Kennedy appeared before the committee Friday with questions about the sustainability of the hospital’s proposed business plan. He suggested that 424 beds is too many for a metropolitan area with other hospitals and that the hospital will be unable to attract the patient mix needed.
“We want this hospital to be a success, but in order to do that we have to ask the tough questions,” Kennedy said. “We can’t just build it and hope that they will come.”
State Rep. Jim Fannin, D-Jonesboro and the committee’s chairman, said legislators will monitor the hospital’s progress.
“I’ve been in business for 40 years,” Fannin said. “I’ve worked through several business plans. I’ve never had one without some risk.”