LSUMC Shreveport: the Good, the Bad & the Ugly

by John Settle
Shreveport Attorney John Settle
John Settle

Although the shock waves concerning the future of Shreveport’s LSU Medical School and the LSU Health Sciences Center have slowed down, the reality of this financial crisis has yet to be fully resolved. The information provided by officials has offered little, if any comfort, to the citizens of Northwest Louisiana much less to the employees and staff at the LSU Health Sciences Center (LSU hospital) and the LSU Medical School.

Just like an oil covered pelican, Louisiana citizens struggle for healthcare.

The stage was set for the tsunami-like chain of events on Friday the 13th of July – the announcement by the Louisiana Division of Administration and the Louisiana Department of Health and Hospitals (DHH) of the loss of funding resulting from Congress’ action that decreased the state’s Federal Medical Assistance Percentage (FMAP) funding rate from 71.92 percent to a projected 65.51 percent. For Fiscal Year 2013, the decrease equated to a total impact of approximately $859.2 million, which equates to over $200 million in state general funds.

Since that date, most questions concerning the LSU Hospital are unanswered, or at least in an unsatisfactory state to a concerned public. There is some good news to be gleaned, albeit collectively it does not offset the sinking effect of the bad news, both on a short term and a long term basis. For example, the closure of a hospital emergency room requires the consent of the Legislature.

It’s really very simple, people

But the bad news is that the governor, without legislature approval, can cut hospital expenditures, but not more than 35% of the previous fiscal year. Not surprisingly, Governor Jindal’s cuts for the state’s hospital budgets are approximately 34.5%. For the Shreveport LSU Health Sciences Center this is $46 million for the 2012-13 fiscal year.

More good news is that the state has now predicted to have a budget surplus of $180 million. The additional cash, which comes from higher-than-anticipated corporate tax revenue, is certainly a welcome surprise.

The bad news is that these funds may not be available to help the state’s current budget woes. When the Legislature agreed to tap the state’s “rainy day fund” to fill holes in this year’s $25.6 billion budget, lawmakers added a provision that surplus revenue would have to go toward replenishing that fund.

But the good news is that Governor Jindal wants to use this windfall to fund the FMAP shortfall. For those keeping score, Jindal has seemingly won practically every budget battle with the Legislature, and don’t be surprised if these funds find their way into the DHH. More good news is that the sale of LSU hospital (along the sale of medical school facility) that occupies the entire block of 1500 Kings Highway requires legislative approval.

Happy Bicentennial Louisiana!

The bad news is that LSU Health Sciences Center officials must, without money from heaven, make major budget reduction that, for the most part, only buy time. There steps have short term gain, i.e. keeping the doors open, but long term losses –like using $15 million of Dean’s funds dedicated to vacant department chairs, delayed maintenance and equipment purchases, etc.

The good news is that the LSU Health Sciences Center (along with the Monroe and Pineville hospital facilities) have been, to date, exempt from Jindal’s downsizing edits.

The bad news is, of course, that Jindal’s administration operates primarily in secretive ways, and changes can be made in current staffing and patient capacities without meaningful input from local elected officials or hospital officials.

The only constant in the ever evolving health care challenge is change, and substantial change at that. There is little doubt that Governor Jindal and his staff will continue to transform the Louisiana health care landscape –for good or bad. How all these changes ultimately shake out and the impact on John Q. Public is a story yet to be told.