The Biomed Takeover of LSU Hospitals


by Elliott Stonecipher

Don’t shoot the messenger!

In a few weeks, at 12:01 AM on October 1st, North Louisiana LSU Hospitals will be taken over by the Biomedical Research Foundation (BRF) of Shreveport, supposedly a part of Governor Jindal’s push to “privatize” our state’s indigent care safety net. Many of us are skeptical of the deal, especially those of us who have learned that much about this deal is not available for the review and consideration of the news media, much less taxpayers.

Among the many areas of concern, I will comment here on an important few. Thus far, my doing so has netted me the threat of being sued. Such is the state of affairs in Louisiana in 2013 – regardless that this is unquestionably public business, and regardless of America’s First Amendment protection against “… abridging the freedom of speech …,” researching and writing and speaking about this deal has become perilous stuff.

All speech is free, except...
All speech is free, except…

Of gods, angels, and the Biomedical Research Foundation

I have learned in this work that what Shreveport’s Biomedical Research Foundation exists to do is a mystery to many of us. We know it leases space in buildings built with taxpayer money, and that it levies a property tax on Caddo Parish taxpayers. I know details of

its genesis, mainly political, but such is not now the point. The point is that BRF is not in the hospital or other healthcare business. In a free and open society where something like handing-off public hospitals to legally protected interests bears a bit of public inspection and debate without fear of reprisal, that lone fact warrants an extensive analysis by the very best legal and accounting professionals. No such due diligence is underway, regardless, I repeat, that BRF has never been in the hospital business.

The Heart of Health Care for 75% of the region
LSU Shreveport Medical Center
Dr. George?

Given that existing hospitals in our North Louisiana area do not care to participate in such a deal, why not wait until an entity with hospital management expertise does care to? Most of us recognize that these hospitals should no longer be publicly operated, but no one told us that in “privatizing” them we would hand them over to an entity that knows nothing about hospital management, or the care of our indigent. Why? Why does BRF want to? What’s in it for them?

Yes, I know one or two of those at the top of BRF have said they are doing “angels’ work” in this deal, but the last time we heard that it came from Goldman Sachs as the Great Recession (if not worse) crushed us, and before that, it was from the boys and girls at Enron as it collapsed and skewered untold thousands of lives. Goldman said, “We’re doing God’s work!” and the Enron brains said, “We’re on the side of angels!” I know a thing or hundred about Faith and God and, yes, angels, and about Goldman and Enron. In my sixty-second year, I know not to look for the former in the displays and demonstrations, or even utterances, of the latter.

Threats notwithstanding, put Elliott Stonecipher down as skeptical. Very.

YouCantHandleTheTruthLet us remember that in all the heat and threats and displays of the rawest of Louisiana political power, BRF is about to be given public assets worth megabucks: in yet-unaudited reports for 2012, the combined revenues of the two subject hospitals was over $437,058,645. In the real world, no matter if BRF officials are actually doing “angels work,” taxpayers should be more than only queasy about such a gargantuan gift of public assets – hospitals – to an entity which has no more experience in running a hospital than I do, which is to say, zilch.

Dr. John George

Various and multiple sources have reported that Dr. George plans to sue some who write, say or print anything about him with which he takes exception, even given that as a member of the LSU Board of Supervisors he is a public official who, too, heads a group seeking to be given a huge chunk of state taxpayer assets. I and others apparently included offered to meet with Dr. George and those who first communicated the threat. Our offer has not been accepted. Apparently at issue for Dr. George is a piece I wrote in which I said he and others at BRF had met at a local restaurant with Bruce Greenstein, a former Louisiana cabinet official.

Greenstein is presently under federal and state investigation for actions arising from his work as Louisiana’s Secretary of the Department of Health and Hospitals. That is important in context: should Greenstein be involved in any way in the BRF takeover of the LSU Hospital, it would be important to media and other sources who are studying and investigating these matters.

cnb FINANCE-HEALTH ts 423.jpgI would not have written that piece were its contents not confirmed by multiple sources present in the restaurant that evening. Dr. George, using careful language, says he was not “at dinner with Bruce Greenstein.” While witnesses have not told me, because I did not ask, whether Dr. George ate dinner, only had drinks, or just sat to visit, various BRF and other officials were there with Greenstein. I have also confirmed who the other attendees were and/or work for, and identified others with involved agencies who came, but did not sit down at the table. I know and trust my sources, and believe them. Steve Skrivanos, Chairman of the BRF Board, confirms his attendance at the gathering, so my original point is confirmed: what, if anything, does Bruce Greenstein have to do with the BRF takeover of our LSU Hospital? When accompanied by Skrivanos’ admission that he was there and meeting with Greenstein, Dr. George’s urgent denial of his attendance validates my question: what is Greenstein’s role in this deal? What was the subject of the meeting? Still and again, I stand ready to discuss all of this with Dr. George the moment he accepts the offer.

The emphasis on Dr. George’s involvement in this deal, threats notwithstanding, is appropriate. While being a member of the LSU Board of Supervisors, he is simultaneously the President & CEO of BRF. The BOS is the Jindal-controlled public board which originally approved the contract between the state and BRF with 50 blank pages, a vote from which Dr. George recused himself. George stresses that a person at the state ethics board opined that his dual roles were not a conflict of interest because he is not yet taking a salary for his BRF work. For several years, I have written and publicly spoken on the subject of our governor’s neutering of the state ethics administration, and was a pro bono consultant for our state’s last legitimate ethics board. With all due respect, such a determination by the Jindal ethics administration is simply no longer determinative. Like cases in the pre-Jindal ethics administration era netted opposite determinations. More to the point, the public’s determination matters: is Dr. George’s dual role in this deal good for the public and taxpayers?

Dr. George?
Dr. George?

Dr. George and his supporters assail the fact that I professionally consulted with Willis-Knighton Health System (WKHS) in this matter. The meaning of that, they say, is that I would not be researching or writing about this otherwise; that I am only doing so on behalf of that client. That WKHS withdrew from the non-existent “competition” to take the hospital months ago is ignored. Even more substantively, neither Dr. George nor any of those personally communicating these threats have taken five minutes to find out why I do this work. I do not get paid for any such research, writing or public speaking on matters in the public interest, and never have. Note: that does not mean I am not getting paid now, because I will be paid later, it means I do not get paid. I do this because I have researched many such deals, and know at least some of the right questions to ask about them. I live, work, and pay too-high taxes here, thus the public money at issue is partially mine. Even absent many other motivations, that would be motivation enough.

Examples of How and Why Alarms Are Sounding

In the new version of the contract between the State of Louisiana and BRF, we learn, as examples, that (1) any and all matters pertaining to this transaction will be exempted from protections afforded the public by the Louisiana Public Records Act, (2) that in the deal, BRF is given the assets of the LSU Hospital, BUT without taking any of the Hospital’s liabilities / debt, and (3) that if and when BRF cannot make its required lease payments to the state, the state takes it back. I mention these shockers for a reason: no matter how inconceivable it may be, where is the downside for BRF if it decides to keep the hospital a couple of years, take the Accounts Receivable and other assets, and pass the emptied hospital back to the state? Is that even possible? Yes. Will the public be able to use the Public Records law along the way to monitor and possibly head-off such bad outcomes? No. Will any of the officers of BRF be on the personal financial hook if such occurs? No. [MASTER LEASE AGREEMENT]

Do I really think such an outrage is likely? No, but such happens here, all too often. Did I believe one public official and one real estate developer could, in Shreveport, use the state highway department to kill a public highway project decades in the making which voters specifically voted to fund and build? No, never … until it happened. Did I believe our governor would sit behind closed doors to engineer the gutting of state ethics enforcement while simultaneously shouting publicly that his was the “ethics gold standard”? No, never … until it happened.

As long as facts such as these are on the table, and questions such as these unanswered, I remain skeptical.

I Will Speak!
I Will Speak!

As long as public officials, public employees and public agencies are in this mix, I will work to expose what they will not reveal.

If I am sued for writing and speaking this, I will ask for all possible help from friends and supporters in my defense, and will by such seek to discover pertinent facts and evidence otherwise withheld from the public.

Along the way, I will not report facts without multiple sources and/or documentary evidence, and never have.

In other words, I will do what I have done for decades, one way or another: I will assume things are not as public officials are saying they are in this deal, because virtually always in such an atmosphere of threats and intimidation, that is the ultimately proven fact.

Thanks to a Public Records Request and related work by online journalist Tom Aswell, the new contract documents pertaining to this deal are attached. It is my understanding that the parties still have not made these documents available to the public. [Master Lease] [Proposed Contract]

Elliott Stonecipher

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.