Health care for Louisiana’s poor could return to a “rationing”-style system — where patients wait months for an appointment — under cuts that have been proposed to shore up the state budget this year.

“We’d be forced to make difficult decisions about the care we provide,” said Jared Stark, CEO of University Hospitals and Clinics in Lafayette, which operates one of the state’s public-private partnerships that now manage most of Louisiana’s charity hospitals.

“We would absolutely have to go back to a system that looks like the rationing that was in place before the public-private system,” he added.

And that’s what officials are referring to as the best-case scenario for health care in Louisiana as the state faces a mounting budget shortfall. Under the worst case, the privatized state-owned hospitals could close, and several programs that help children, the elderly and the developmentally disabled would end.

“That’s just the reality of the situation — where we are at,” said Department of Health and Hospitals Undersecretary Jeff Reynolds.

The bleak picture was just the latest to be put on display as lawmakers gather in a special session to find ways to fill the $900 million shortfall in the state budget that ends June 30, as well as the $2 billion shortfall in the budget that begins July 1. The public-private hospital system that’s at risk was developed under Gov. Bobby Jindal’s administration to replace much of the old state-run charity hospital system for the poor and uninsured. The charity system was known for the sometimes six-month or longer wait indigent patients faced before they could get an appointment with a doctor.

“Individuals have died before they have even made the appointments,” state Rep. Pat Smith, D-Baton Rouge, recalled of the charity system’s long wait times.

The privatization was meant to save the state money and make health care for the indigent more efficient. While it hasn’t cut costs, Reynolds said it did improve health care for the poor and largely eliminated the backlog that created long appointment schedules.

“If you were private pay, you got treated one way, and if you were uninsured or on Medicaid, you got treated another way,” Reynolds said of the old charity system.

Stark and other public-private hospital leaders told the House Appropriations Committee on Tuesday that they don’t want to scale back their efforts, but drastic cuts to provider payments that have been proposed under the budget cut plans would force their hands.

Under the best-case scenario, DHH’s budget for the fiscal year that ends June 30 would be slashed $64 million, but because many of those funds are tied to federal matches, the real hit would be more than $169 million.

The cuts include deep reductions to hospital provider payments, threatening the future of public-private contracts. For the Lafayette hospital, the cuts in state funding and federal match would be about $26 million. At Our Lady of the Lake Regional Medical Center in Baton Rouge, the cut would be $18.1 million.

“Some of them may walk; some of them may shut down,” Reynolds said.

Reynolds said DHH plans to begin work on the reductions this week, but several legislators urged the agency to consider other cutbacks and look for ways to root out fraud.

“I have real concerns here in Baton Rouge,” said Rep. Franklin Foil, R-Baton Rouge. “If we did not have these contracts in place, what would we have?”

Gov. John Bel Edwards’ administration has proposed using $128 million from the state’s reserves and $200 million from BP oil spill settlement money to help plug the immediate shortfall in the state budget. The Senate Finance Committee passed bills on Tuesday that would kick-start that process. Those funds still have to be approved by the full Senate, as well as win support in the House.

Edwards also has proposed several tax hikes that will be vetted this week, on top of the cuts.

Scott Wester, CEO of Our Lady of the Lake Regional Medical Center, said the private partners can’t be expected to bail the state out of its fiscal mess.

“We’ll have to make very difficult decisions,” he said. “If we have to terminate the agreement, we’ll terminate the agreement.”

Under the worst-case scenario, DHH’s budget would be cut a dramatic $252 million for the final four months of the fiscal year. When federal match rates are added, the total hit to the health care budget would be $666.8 million.

Reynolds testified that such a cut would end all payments to the private partners that run the state’s hospitals, effectively ending the contracts to provide health care, and likely would lead to the shuttering of hospitals. It also would force DHH to eliminate most services for youth, the elderly and the developmentally disabled.

Follow Elizabeth Crisp on Twitter, @elizabethcrisp.

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