The planned May opening of the new University Medical Center at New Orleans has been put on hold, until Aug. 1, while local lawmakers suggest the delay stems, at least in part, to concerns that Gov. Bobby Jindal’s proposed budget provides less money than hospital administrators say they need.
No specific reasons were given as the private operators of the $1 billion state hospital confirmed Monday that the opening date has been pushed back.
“With a project as large and complex (as this one), adjustments in timelines are extremely common,” Gregory Feirn, chief executive officer of Louisiana Children’s Medical Center, said in a prepared statement.
But the announcement comes at a time when Jindal’s proposed $24.5 billion budget includes $88 million less for the hospital than the amount LCMC officials have said is needed.
Feirn said the change of plans is not related “to our ongoing discussions with the state regarding the budget process” but rather the result of “constantly assessing the ability to plan for a successful opening.”
House Speaker Pro-tem Walt Leger III and state Sen. Ed Murray, both of New Orleans, said several factors are contributing to the delay, including the budgetary one.
“Certainly there continues to be concern whether or not the facility will open based on the funding issue,” Leger said. “It’s troubling, to me especially because of the importance of this as a medical training facility providing health care to the region and to the state with a Level 1 trauma center and additional mental health bed capacity.”
Many issues are involved, “and I think they all kind of come together,” he said. “If the funding was in place, would it be open in May as scheduled? I have to feel it is related.”
Leger said Louisiana Children’s Medical Center needs access to the building for a period of time before the opening so the staff can be trained and become familiar with the facility. In addition, he said, physicians-in-training end their work cycles in July, and it would make no sense to move just before current ones leave and new ones come in.
Jindal’s Commissioner of Administration Kristy Nichols said late Monday in a prepared statement: “The change in schedule was a UMC decision and is unrelated to funding discussions. We are continuing to work with our hospital partners on funding and are confident we will agree on a solution soon.”
The $1 billion construction project is fully funded, Murray said. But, he said, “the operational budget side could have something to do with them opening up on Aug. 1.
“Why would you want to walk into something when you know it’s a losing proposition?” he asked.
The Jindal budget proposal keeps at a standstill level the state health care dollars going to hospitals in eight areas of the state. In the current fiscal year, the budget included approximately $1.2 billion for the hospitals. The Legislature will debate the proposal when it convenes April 13.
In all, the budget proposal for next year is $142 million short of the total that LSU and its private partners throughout the state say is needed to run the hospitals in the fiscal year that begins July 1. In Baton Rouge, the difference amounts to $7.4 million; in Lafayette, it is $11.6 million.
Louisiana Children’s Medical Center is a nonprofit company that runs Children’s Hospital, Touro Infirmary and the Interim LSU Hospital and is contracted to operate the new University Medical Center. The UMC — built largely with federal hurricane recovery dollars — is part of a 70-acre medical complex that also will include a new Veterans Affairs Medical Center. Construction for the state facility is on schedule, with completion projected in April.
Murray said LCMC officials hope to get the funding issue resolved during the legislative session. He noted that the New Orleans private partner is not the only hospital operator coming up short in the Jindal budget.
Cooperative endeavor agreements allow the private partners to reduce services if appropriate financing for the hospitals is not forthcoming. The private partners also can exit the deals they made with the state.
“All these private partners have decisions to make,” Murray said.
Leger said the New Orleans hospital’s financial shortfall makes no sense to him because once the move takes place, LCMC will make a $40 million lease payment to the state. That money can then be used to draw down more than enough federal funds to fill the $88 million gap, he said.
“It’s not a reasonable fight to be having,” Leger said. “It’s going to be a world-class facility. We need to fund it accordingly.”
Leger said the hospital funding shortfall is not the only “irresponsible decision” the Jindal administration has made when it comes to health care in the New Orleans area. “The community health exchange, which provides a medical home for 60,000 citizens in our region, is still not funded,” he said.