by Elliott Stonecipher
As the State of Louisiana’s October 1st hand-off of the Shreveport and Monroe public hospitals rapidly approaches, some further information is finally beginning to make its way to the public. In this morning’s Shreveport Times, reporter Melody Brumble draws attention to the formation of the new board of directors of Biomedical Research Foundation Hospital Holdings, LLC (BRFHH). Shreveport’s “Biomed,” as it is known, formed this new entity in order to lease the two State hospitals.
Biomedical Research Foundation As a “Partner” for Hospital Privatization
As has been previously stressed, the Biomedical Research Foundation, according to its website, exists for the purposes of “… promoting public and private support and collaboration to increase knowledge-based economic development,” and is not a hospital, or hospital management, company. All such critical services in operating Shreveport’s LSU Medical Center and Monroe’s E. A. Conway Medical Center, will be contracted out to unidentified vendors.
BRF exists on a mix of public revenue sources, including leases of its state-financed buildings back to the state’s LSU Medical Center in Shreveport, and a property tax millage paid by residents and businesses in Caddo Parishes. Its latest federal tax return, Form 990, for 2011 and filed on November 14, 2012, reports:
— total revenue of $12,649,215, down from $17,863,793 in 2010, a -29.1% decline;
— total expenses of $12,804,643, down from $14,161,249 in 2010, a -9.6% decline;
— revenue remaining after expenses, (minus) -$155,428, down from (plus) +$3,702,544 in 2010.
— $50,328,784 in net assets, believed to be virtually exclusively fixed assets, e.g., the aforementioned publicly-financed buildings. (As reported previously by Ms. Brumble, BRF’s income from the State for medical school building leases was boosted from $2.9 million to $8.6 million per year in this past June, in preparation for this hand-off.)
These amounts reported to the IRS may be compared to the $437,000,000+ in patient revenue which flowed through these two hospitals in 2012.
While Governor Jindal’s “privatization” op to move the state’s hospitals for care of indigents and other poor into private hands is underway in various Louisiana cities, no other such hand-off has been between the State and a non-hospital company. Given BRF’s history of public funding, the Jindal administration’s highly-touted “public-private venture” structure does not apply in this case, which is, effectively, “public-public.” Such being the case, the public is left to wonder why these giveaways are not postponed for as long as it takes to find a willing hospital company with its own assets to join the State in a true privatization arrangement.
It is certainly no secret that the BRF op by the Jindal team prominently features two state senators, in whose districts the two hospitals exist, Greg Tarver in Shreveport and Francis Thompson in Monroe. In a meeting sponsored by BRF and held last night at Shreveport’s Galilee Baptist Church (here is Ms. Brumble’s report in the Shreveport Times), Senator Tarver, BRF President Steve Skrivanos, and BRF Board chairman and member of the LSU Board of Supervisors, Dr. John George, conducted the meeting. (The three are shown facing the audience in the photo accompanying Ms. Brumble’s report.) Likewise, Senator Tarver has explained and promoted various details of the hand-over in television news coverage.
An elected official’s high-profile involvement in such a venture is subject to various state and federal laws, including applicable Ethics Code and Louisiana Financial Disclosure provisions. Among the issues raised in this instance, however, is how does such continuing involvement of state officials – these two senators and a member of the LSU Board of Supervisors – impact the legality of what these hospitals do in the future? When medical malpractice suits, as one obvious example, are filed as of October 1, 2013, from whom does a successful litigant collect her or his damages? And, do other State “partners” in these “privatization” deals have state senators thus involved? While answers to such questions may be included in the controlling contract, it is far too dense for the public to begin to understand.
As previously reported, the State has agreed with BRF’s demand that nothing about its operation of these hospitals be subject to the Louisiana Public Records Act. Likewise, the nomination form for members of the BRFHH board does not mention the possible applicability of Louisiana Personal Financial Disclosure Statements in such appointments, likely meaning that BRF does not intend for those rules to apply, either. According to a press release by BRF, the following is a breakdown of categories for BRFHH board members:
North Louisiana Community Representatives 7*
LSU School of Medicine Shreveport Chancellor 1 (Appointed)
BRFHH CEO 1 (Appointed)
Biomedical Research Foundation (BRF) Board Members 4 (Appointed)
So, the new board being set-up to run these hospitals will include six members who are, one way or another, already running BRF and its co-mingled LSU Medical School, and seven members from the “community.” In fact, many sources believe that the seven “community” representatives are specifically reserved for selection – and, thus, majority control – by the two state senators. Notably, when all the fine print in the related documents is considered, the senators and/or any other elected officials who have the political stroke to appoint board members might choose to select for appointment members of their own families. Shown first here is the paragraph included on the nomination form which defines “immediate family,” and second is the paragraph of determinative language as to when and to whom such familial limitations apply:
“According to the U.S. Office of Personnel Management, immediate relative is defined as an individual with any of the following relationships to the board member nominee: (1) Spouse, and parents thereof; (2) Sons and daughters, and spouses thereof; (3) Parents, and spouses thereof; (4) Brothers and sisters, and spouses thereof; (5) Grandparents and grandchildren, and spouses thereof; (6) Domestic partner and parents thereof, including domestic partners of any individual in 1 through 5 of this definition; and (7) Any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”
“Except in the case of the BRFHH CEO and the Chancellor of the LSU School of Medicine in Shreveport, must not be an employee or immediate relative (see definition above) of an employee of the BRFHH or the Biomedical Research Foundation of Northwest Louisiana.”
So, with the obvious exception of the CEO of BRFHH and the med school chancellor, board members cannot be employees of BRFHH or BRF, nor can board members be “immediate family” members of BRF and BRFHH employees. But, “immediate family” of powerful politicians who might snag an appointment – or seven – are not prohibited.
Perhaps most important in everything related to this hand-over is this: if any Louisiana resident objects to this deal – even if only to ask why not wait until a qualified hospital company is willing and available to partner – to whom does he or she turn? The answer, of course, should be the legislature – you know, that “separation of powers” thing – which allowed the governor to take it out of the position to approve or disapprove the deal, unconstitutional as that almost certainly is. Next comes the controlling LSU Board of Supervisors, of which Dr. John George is a member, and which approved the original contract with BRF with 50 pages missing. There is no other state entity to which one may appeal.
‘No way to run a railroad … much less health care for the indigent and other poor.
Over a period of 35 years, Elliott Stonecipher has provided professional consulting services to Willis-Knighton Health System, along with many, many other healthcare service providers. WKHS is a Shreveport-based company which, in May 2013, withdrew from consideration as a partner in the subject “privatization” gambit of Governor Jindal. WKHS has no involvement of any kind in anything about which Elliott Stonecipher writes or publicly speaks. WKHS has no foreknowledge of any such subjects, and no participation of any kind in their conception or preparation. WKHS officials, its other employees and it supporters receive their copies of Mr. Stonecipher reports not one minute earlier or later than any other recipient. Any assertions or allegations to the contrary are intended to distract from the facts which Mr. Stonecipher presents.
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.