Private administrators in LSU charity hospital deals are nervously watching state budget negotiations to ensure they get the money they need as the Louisiana House and Senate enter the last day of the session.
LSU’s New Orleans partner, University Medical Center, got the money it requested in the Senate’s budget proposal, but the partner in Baton Rouge, Our Lady of the Lake Regional Medical Center, wants more.
The House didn’t fully fund LSU hospitals and rejected the Senate’s proposal. Now, legislators from both chambers are negotiating a final document.
Gov. Bobby Jindal made turning over management of LSU’s hospitals to private administrators a hallmark of his administration, arguing it would save taxpayer dollars while expanding access to care for the poor and uninsured. But when the administration drafted its proposed $24 billion spending plan for the fiscal year that begins July 1, the dollars came up far short of requirements. The House’s version of the state budget also came up short.
Hospital officials reminded legislators that the terms of their deals allowed the private administrators to cancel the contracts if the state failed to provide enough money to run the charity hospitals.
When the upper chamber got the budget bill, senators stepped in to give the newly built University Medical Center in New Orleans the money its administrators said was needed.
But Our Lady of the Lake, known locally as the Lake, requested $19 million to cover unexpected expenses from the closure of an emergency room at another hospital in Baton Rouge.
State Department of Health and Hospitals Undersecretary Jeff Reynolds said the administration will work with the Lake if its financial projections turn out to be correct. “If the budget passes, I don’t see any concerns,” he said.
How much is currently appropriated per hospital deal was unavailable late Wednesday. Reynolds said calculations were still being made. Involved are deals in New Orleans, Baton Rouge, Lafayette, Houma, Bogalusa, Lake Charles, Monroe and Shreveport.
But the spending plan negotiators are dealing with includes $113 million above standstill levels for operation of the University Medical Center in New Orleans — a $25 million bump from funding originally sought.
“We understand the appropriations are there to fully fund the partnerships, including the University Medical Center,” said Gregory C. Feirn, chief executive officer of LCMC Health, operator of the New Orleans hospital.
Feirn said the original $88 million request over the current year’s budget was based on work done in the fall when a move from the LSU Interim Hospital to the new $1 billion-plus, state-of-the-art academic medical center was scheduled for the spring. The move isn’t happening until Aug. 1 but activity is already going on in the new facility to get it ready.
“As we get more to the opening of the new facility, the overlap of operating two facilities for longer than expected increased costs,” Feirn said.
Part of the expense is associated with leased equipment, Reynolds said.
In Baton Rouge, officials of LSU’s partner Our Lady of the Lake Regional Medical Center are carefully watching budget negotiations, hopeful that they will yield additional dollars.
Lake CEO Scott Wester said the budget lacks $7 million in state revenues, which would attract another $12 million in federal funds. “I don’t know what’s going to happen,” he said.
Wester said the capital area delegation is telling budget negotiators that “it might be appropriate to include more than originally forecast.”
The closure of Baton Rouge General Medical Center-Mid City’s emergency room is leading to extra costs for the Lake, Wester said. The Lake has had to invest more dollars to expand hours at LSU Health’s urgent care clinic in the area to give access to patients who once showed up at the Mid City ER. It also is providing additional services at the 24-hour urgent care clinic in north Baton Rouge, he said. In addition, more patients are entering through the Lake’s ER.
Wester said the Division of Administration as well as state health officials are aware of the situation.
“They have told us not to restrict care or access. That’s why you have to get as close as you can on the budget estimate of the public-private partnership,” Wester said.
Wester said $7 million in state revenue is not much considering the size of the budget, but “when you bring it down to the local market, $19 million is large.”