Louisiana has built a $1.1 billion medical teaching hospital in New Orleans, but the manager of the soon-to-be-opened University Medical Center says Gov. Bobby Jindal’s budget leaves it millions short of the operating cash it needs.
Altogether, private operators of the state-owned hospitals previously run by LSU asked for $142 million more than Jindal proposed to spend on them in the fiscal year that begins July 1. Nearly $88 million of that was for the hospital in New Orleans, which will shift services from an interim facility to the larger, new hospital this summer.
The Republican governor’s budget would keep funding flat for the deals that privatized nearly all the LSU hospitals and clinics, maintaining the same $1.2 billion combined state and federal spending level Louisiana allocated for this year.
The private hospital managers proposed budgets “that represented the bare bones of what is required to deliver care to the people of Louisiana,” said Gregory Feirn, CEO of LCMC Health, which runs the state-owned hospital in New Orleans.
“If the state does not restore the funding, then the state is deciding not to allow for care for the people of New Orleans, deciding not to open their state-of-the-art facility that is nearly finished and striking a crippling blow to medical education in Louisiana,” he said in a written statement.
State lawmakers are questioning whether Jindal’s proposed financing level will mean reduced services to poor and uninsured patients, under deals that Jindal pushed as a way to improve and expand access to care.
New Orleans lawmakers are particularly concerned. They have been waiting for the city’s new hospital to open and expecting more patient beds and services would come online with it.
“We expect to open and administer a world-class facility that we’ve spent over a billion dollars constructing and to fund it at the same level as last year? We expect it to function the same way we projected it to?” state Rep. Walt Leger, D-New Orleans, the No. 2-ranking House member, asked Commissioner of Administration Kristy Nichols when the budget was unveiled.
Nichols said the Jindal administration is willing to continue negotiations about financing for the hospital privatization deals as lawmakers work on a final version of next year’s budget.
in the legislative session that begins April 13.
“We’re fully committed to the partnerships, and we’re going to work with them to make sure they have adequate funding,” she said Tuesday.
But lawmakers must sift through competing priorities as they struggle to close a $1.6 billion shortfall for next year. Jindal’s $24.6 billion budget proposal already relies on as-yet unapproved tax credit changes and still requires cuts across agencies.
Feirn said the financing provided for New Orleans’ hospital is 20 percent less than requested.
The manager of the LSU hospital in Lafayette sought nearly $12 million over its current budget, while the operator of the state-owned hospitals in Shreveport and Monroe asked for $23 million more.
Neither of those hospital managers returned requests seeking comment about Jindal’s budget.
Jindal has privatized nine LSU-run hospitals and their clinics since 2013 through no-bid contracts. In most instances, the management company of a nearby hospital took over operations. Three contracts closed an LSU hospital and shifted its services to private hospitals.
Each of the contractors sought to boost their funding next year.
“Our job is to make sure that to the extent that is appropriate, we manage growth in those expenditures,” Nichols said.
State Sen. Ed Murray, D-New Orleans, said he worried “managing growth means to deny treatment.”