By Elliott Stonecipher
Some readers well remember it. A few months back, the LSU Board of Supervisors infamously approved the contract by which the State of Louisiana handed over our LSU Hospitals in Shreveport and Monroe to the Biomedical Research Foundation. The approval was infamous because 50 pages of it, the most important 50 pages of it according to many who are paid to know, were blank. Yep, blank, as in containing nothing but white space, blank. These months later, what should have been on those 50 pages continues to ooze out and away from the control of Governor Jindal’s well-known Anti-Transparency Gang – i.e., all state officials under his control. It is increasingly clear that what the people of Louisiana did not know, did, and will continue to, hurt them … perhaps a lot.
Biomed, as it has long been known to its Shreveport neighbors and taxpayers – yep, it levies its own property tax millage – was a stunner of a pick for Governor Bobby Jindal’s so-called public hospital “privatization” gambit. First, Biomed never had any more to do with hospitals or healthcare than it had to do with dog-breeding. Next, its top guy, Dr. John George, has an epic conflict of interest since he is also a Jindal campaign contributor, and one of the guv’s appointees to the aforementioned LSU Board of Supervisors. Last, even with more than two years left in office, Jindal rushed the deal through as if it was chock-a-block full of … well, the kind of stuff that destroys presidential ambitions as certainly as Duck Dynasty has better TV ratings among Louisiana voters than Rachel Maddow.
The Louisiana Bond Commission: Treasurer John Kennedy Puts Meat on the Bones of the Crummy – Illegal? – Deal
John N. Kennedy, Louisiana’s four-term State Treasurer, also serves as Chairman of the State Bond Commission. The Bond Commission’s role in this woeful Jindal op is explained on the Treasurer’s official website:
“The Louisiana Constitution of 1974, Article VII, Section 8, grants constitutional status to the Commission and provides that ‘No bonds or other obligations shall be issued or sold by the State directly or through any State board, agency or commission, or by any political subdivision of the State, unless prior written approval of the Commission is obtained.’”
Thus, Treasurer Kennedy and the Bond Commission found themselves meeting late last week to approve a list of would-be capital outlay projects. Included among those were some which meant Louisiana taxpayers would be buying very expensive hospital stuff to hand-over to Biomed, or, more precisely, its brand spanking new hospital subsidiary, “Biomedical Research Foundation Hospital Holdings,” or BRFHH.
Before the hearing’s smoke had cleared, a typically savvy and well-prepared Kennedy had smoked-out crucial details of what the governor’s “privatization” ruse actually is.
(As you watch the following clips of the Bond Commission meeting, you may note that speaking for Jindal’s Division of Administration (DOA) is its lead attorney, Liz Murrill, seated on the right of the speakers’ table, who served previously as Jindal’s Executive Counsel. Speaking for Biomed / BRFHH and the LSU Medical School, BRFHH’s partner in all of this, is Mimi Hedgecock, seated on the right side of the speakers’ table. Ms. Hedgecock, prior to being dispatched to the med school job, served as Jindal’s Policy Advisor. Also, when Kennedy speaks to “Eddie,” he is addressing State Senator Edwin Murray of New Orleans, a member of both the Legislative Audit Advisory Council and the Joint Legislative Budget Committee.)
The first segment of the video/audio tape from the hearing deals with those taxpayer gifts to Biomed – even though it is now supposedly on its own and a “private” entity. The second segment, is a continuation of the first, but the subjects probed by Kennedy shift to the inexplicable way the deal has been structured, and the nervousness and defensiveness of key Jindal officials and agents as they attempt to answer that which Jindal and his Biomed buds worked hard to never have asked in public, much less answered.
Even those in the fairy tale contingent can easily hear and understand that this, and possibly Jindal’s entire “privatization” humbug, is some variety or another of a decidedly inside deal. As many in Shreveport and Monroe can attest, the fact that two veteran state senators – Shreveport’s Greg Tarver and Monroe’s Francis Thompson – are the BFRHH political bosses along with George maximizes and highlights the extraordinarily political nature of the operation of these hospitals. Such is the opposite of what Jindal pre-billed these “privatizations” to be.
Around the same time Kennedy was presiding over the Bond Commission meeting, he also penned and publicly released an opinion column entitled “The Financial Risk of Charity Hospital ‘Privatization'”, a brief which details how Jindal’s repeatedly sworn rationale for “privatizing” state hospitals passes no muster but his own.
A recent publication from the Legislative Fiscal Office agrees with John Kennedy’s take on the possible budgetary impact of handing state hospitals over to non-public operators. The LFO’s “Focus on the Fisc” report to state legislators (scroll to Pages 10-12, “Health & Hospitals” – “Hospital Lease Payments”), however, is different. Its target is ways in which the possible manipulation of certain money transfers – like early payment to the state of leases owed by the new “private” operators – may be used to create the appearance of savings to taxpayers which are not fact. Any such pre-payments by, say, BRFHH, necessarily create a budget hole for out-years, even if they might help Jindal to claim on the presidential campaign trail that his hospital op “saved Louisiana taxpayer money.”
The known details of the close political relationship between BRFHH and the LSU Board of Supervisors – and, by extension, Jindal – add credence to assertions that BRFHH – supposedly now a hospital company operating on its own – will make such pre-payments as ordered by Jindal and/or his DOA and Department of Health & Hospitals (DHH). Such is something a real hospital company would not be allowed to do, either by its Board of Directors, or the law and regulations. Since state money via the federal government flows to BRFHH as Jindal / DOA / DHH choose, the near $50,000,000 annual facility and lease payments owed to the state by BRFHH may be paid / repaid as necessary to suit Jindal’s claims about cost savings from “privatization.”
Notably, since Treasurer Kennedy has acknowledged he is considering a run for governor in 2015, he is among those who well understand what these funny-money transactions do to future state budgets, and none of it is good. A pre-payment now, as the LFO report details, is a gaping budget hole later.
Most of us agree that our charity hospital system, the last one standing among American states, has long been a relic of unnecessary taxpayer expense, crying out for a sane replacement as long as such did not damage the quality of healthcare for our poor. That the old system has now been replaced is a fact. That the Jindal answer – especially in Shreveport and Monroe – can be expected to provide quality healthcare less expensively or politically is very much in doubt.
Louisiana political history proves one thing about such ops: a relative handful of political players expect to benefit mightily.
Elliott Stonecipher, through his company, Evets Management Services, Inc., has previously provided professional services to Christus-Schumpert Medical Center, Willis-Knighton Health System, and many other healthcare providers. (Willis-Knighton formally and publicly withdrew from consideration as a partner in the subject “privatization” push by Governor Jindal in May 2013.) No past or current client has either foreknowledge of any subjects about which Mr. Stonecipher writes, or participation of any kind in their conception, preparation or timing.
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 sharing – unedited only, please – of his work is requested and appreciated.