In 1736, with the founding of “Big Charity” hospital in New Orleans, Louisiana’s sprawling “safety net” healthcare system for the poor began. Governor Huey Long broadly expanded the system two centuries later, including the addition of physician training at the LSU Medical School in New Orleans. Ours is the only remaining such system in America, and has the look of a 1927 Ford Model “A” roll-out at the 2013 Detroit Auto Show.
Just as Hurricane Katrina was the catalyst to shutter Big Charity, so is there now a broader storm of change, including the incoming public policy scud missile, ObamaCare. Given that our system for the uninsured was less about healthcare and more about Louisiana political patronage, Governor Bobby Jindal’s predisposition to dismantle the system found its moment. Using deep cuts in federal Medicare reimbursements as the supposed catalyst, he has opted to “privatize” state hospitals. Months into that transition, his supposedly creative destruction of the old system has low and still dropping confidence among those who see what’s coming. Here are key reasons:
1. “Privatization” Means No Public Money … ‘Right?
The work toward a private take-over of Shreveport’s LSU Hospital began last fall. Its funding, however, was unknown until the bitter end of the recent legislative session. When state budgeters miraculously “found” over $40 million dollars in “reserves” to continue funding the hospital, such meant that the Shreveport hospital continues to be a state operation, paid for by Louisiana taxpayers. The broader issue is that there is zero transparency about how this hybrid can work.
2. No One Knows Who Will Run the Hospital
The Biomedical Research Foundation (BRF), led by Dr. John George, has never owned / run / managed a hospital, but will still “take over” our LSU hospital. BRF levies a property tax, but stresses that it will not spend any of that money for this. Its Form 990 tax return for 2010 showed total revenue of $17,863,779, which dropped to $12,804,643 on the 2011 return (submitted in November 2012), meaning cash-flow is a very real concern once state funds are gone. Before we even get to any of that, though, BRF must find and pay yet another entity to run the hospital.
Given such obvious problems, BRF’s takeover contract with the state might well have faced serious opposition from the approving body, the LSU Board of Supervisors. Instead, even with 1-in-4 pages of the contract blank when submitted, the approval vote was unanimous. Dr.George is himself a Jindal appointee to this Board of Supervisors. To supposedly resolve that whopper of a conflict, he recused himself from the vote, and is said to be leading BRF without pay. Regardless, confidence in the broader initiative thus took yet another hit from such coziness between the Supervisors and those to be supervised.
State Treasurer John Kennedy, on July 2nd, penned an op-ed for state newspapers on the subject of these hospital takeovers. Leading into a list of thirteen important questions “to which taxpayers are entitled to straight answers,” he adds,” … the details of the new arrangement matter, and they haven’t been forthcoming. Sweeping rhetoric is no substitute for rigorous financial analysis when dealing with billions of dollars of taxpayer assets.”
3. The Replacement Now Being Cooked-up Is Hyper-Political
As of now, the BRF set-up is more political op than healthcare. Co-leaders, in fact, are Dr. George and Senator Greg Tarver, a powerbroker who has not hidden his intention to control a majority of votes on the “new” hospital’s board. How does this replace the historic role of political patronage in Louisiana’s healthcare for the poor and uninsured?
4. Protecting the LSU Medical School is Priority #1, #2, #3, #4 …
The extraordinary quality of our healthcare is boosted by physician training at the LSU Medical School – the bat and ball, and maybe the glove, too, of the system.
All compensation included, we pay med school Chancellor Robert Barish and Vice Chancellor Hugh Mighty more than $1.2 million a year. “We,” may the record show, refers to taxpayers – not Governor Jindal, or cabinet Secretaries, or pay-to-play members of the LSU Board of Supervisors. What it costs us to protect the med school with our labor and taxes is lost on the med school gentry, breathe as they do the rarified air of plush and insulated environs on Kings Highway (no pun intended) in Shreveport. These public employees abhor oversight of any kind.
In May, the Louisiana Department of Health & Hospitals (DHH) asked Willis-Knighton to submit a proposal for additional med school funding. WKHS has given the school $84.5 million over the past twenty years, though almost no one knew it before this public discourse. (While all hospitals share in the benefits the school provides, the WKHS contribution is disproportionately high, and some do not contribute.) WKHS quickly responded with an offer of $25 million per year to the med school, on top of its current $9 million. In return for what would thus be about one-third of the school’s annual spending, WKHS asked to name one-third of members on some oversight boards, with control of outpatient clinics and funded residency slots.
Barish, George, Mighty & Associates likely spend more time on their daily sock choice than they used to consider and discard the offer. We should not mistake the result: they summarily denied the public – that is, taxpayers – an additional $25 million a year to support the med school, shifting that burden to us.
Elliott Stonecipher’s reports and commentaries are written strictly in the public interest, with no compensation of any kind solicited or accepted. Appropriate credit to Mr. Stonecipher in the unedited sharing of his work is requested and appreciated.