LA Hospital Privatization & Biomed Worms Turn …


by Elliott Stonecipher

The Heart of Health Care for 75% of the region
Shreveport Medical Center – University Health?

The LSU hospitals in Shreveport and Monroe are once again in the news, as detailed in an article updating the main reasons why by Marsha Shuler at The Advocate.  As reported, Governor Jindal’s sketchy hospital privatization op is now, finally and officially, teed-up by the state Department of Health & Hospitals (DHH) for possible approval by the federal government’s Centers for Medicare and Medicaid Services (CMS).

Too much control?
Too much control?

The documentary record detailing DHH pursuit of CMS approval, shown on this page from DHH’s BayouHealth website, is extensive, underscoring the fact that gaining approval has been anything but routine.  Clearly, CMS scrutiny is focused on the way the Jindal administration rigged his healthcare restructuring to secure from new hospital “partners” extraordinary amounts of money, in advance, to be used in broader state budgetary needs.

Censorship-ControlRather than an emphasis in his healthcare push on the protection of the public’s interests, the focus has been on Jindal’s political control of every aspect of every one of these deals around the state.  Jindal uses the huge hospital lease pre-payments from partners even given that the state’s Legislative Fiscal Office has stressed from the jump that this is a mistake to be visited on the state – and new governor – a couple of years down this road.  (SEE “Hospital Lease Payments” in September 2013 issue, and “FY14 Hospital Partner Payments” in November 2013.)

Should CMS not approve of the centerpiece hospital partner lease payments, news media and public attention may well shift back to other of the more questionable aspects of the deals.  Following is a revisit of just few of those in the takeover of the Shreveport and Monroe state hospitals by the Biomedical Research Foundation.


A Conflict of Interest for the Record Books

A near-deafening alarm in Biomed’s deal to grab-up these two state hospitals was the obvious, serious conflict of interest on the part of Dr. John George.  Dr. George is the CEO of the new hospital company, and has officially been such for over three months.  Given that George is also a Jindal appointee serving on the LSU Board of Supervisors – the pay-to-play group of big-bucks Jindal contributors – and given that the BOS negotiated the deal and approved the contract with Biomed (with its now-infamous 50 blank pages), no ethicist was required to spot the epic conflict.  Because George recused himself from the actual contract vote – not at all the real point, of course – the head of the state’s ethics administration gave the arrangement the OK, as long as George did not receive any pay for his Biomed gig.

LSU-BOS-guilt-by-associationNow, deep into his work as the entity’s top guy, George continues on the LSU Board of Supervisors.  The public is left to wonder where the ethics administration is now, not to mention the broader Biomedical Research Foundation Board, the new and supposedly separate Biomed hospital board, DHH, the governor’s deal overseer Division of Administration (DOA), and the feds, to name a few who might care.  Put directly, is George still working for nothing, even with so many reports of the stunningly high salaries being arranged for such higher-ups at his hospitals?  Only George, and a few necessary others, know.

Notable, too, in this context is that there has been no mention from Biomed that it has even bothered to contract with any professional entity to actually manage these hospitals.  Notwithstanding its assertion to the Joint Legislative Budget Committee that it would do so – since Biomed had no such experience and was in no way qualified for such a task – it now seems the known and identified top players, George, along with State Senators Greg Tarver and Francis Thompson, are handling everything themselves.

ethics-$$$DHH Just Standin’ Around With Nuthin’ To Do … and That Conflict of Interest

In the January 3, 2014, most recent letter from DHH to CMS is this brain-twisting paragraph on Page 5:

The leases of LSU’s facilities and equipment with its partners were negotiated by LSU (Board of Supervisors) and the partner.  DHH did not participate in the lease negotitations, nor did DHH participate in the appraisal process, nor did DHH participate in the determination of the rent to be paid by the partners under the lease agreements.

OK, so let’s get this straight.  The feds are being told here that the chunk of Louisiana government which is in charge of everything related to these deals – that would be the Department of Health & Hospitals, DHH – had nothing to do with them … it was just standing around waiting for something to come along that needed its time and attention?!  Worse yet, just on the off-chance the people of Louisiana wanted to imagine it did not matter that a member of the LSU Board of Supervisors was also the boss man of the hospital with which BOS was partnering, we are hereby and fully disabused of any such imagining.

ethics-road-signMy best guess is that this paragraph was mainly intended by DHH – the author of the letter, after all – to demonstrate that it is running a hundred miles an hour away from these perhaps cratering deals.  Notably left unmentioned in DHH’s attempt to disown the mess is the governor’s Division of Administration (DOA), known by a few hundred or so of us to be up its hairline in every piece of all of this.

Of John George and Bruce Greenstein and Alan Levine and Hospital Management Associates

Some readers may remember my report last summer that Louisiana’s former Secretary of DHH, Bruce Greenstein, had been recognized as he dined in Shreveport with George, Biomed’s Steve Skrivanos, and others.  Given that Greenstein, a Jindal fave, had resigned the DHH job earlier last year amid news of state and federal investigations, still underway, involving certain state healthcare contracts for which he was responsible, such a meeting was big news around the state.  Notwithstanding the fact that other diners saw the participants and said so, with some even taking pictures of the group, George, well aware of how such a meeting would appear, denied being there, and threatened to sue those of us who wrote and published the fact.

Now, to the surprise of no one with whom I have spoken, various sources are reporting that Greenstein is, yep, now a consultant to these players, either to Biomed directly, or to its joined-at-the-hip partner, the LSU School of Medicine.  That each of these mentioned reports remain unconfirmed is in no way surprising.  Biomed officials have not responded to news media requests of which I am personally aware, and Biomed’s contract with the LSU Board of Supervisors uniquely provides for restricted applicability of the Louisiana Public Records Act, e.g., obtaining such Biomed related information from involved and otherwise included state agencies.  Should Biomed publicly announce new or contradictory information, I will, of course, be included among the reporters of such.

Too, the January 3, 2014, DHH letter to CMS confirms another fact hidden by the Jindal administration until the deals were done and signed.  On Page 3 of the letter, we learn …

“… LSU and the State sought to accelerate the timeline for transitioning the State public hospital system to the public-private partnership model.  LSU was supported in these efforts by consultants from Health Management Associates, as well as other advisors.”

Words-for-ethicsHealth Management Associates – known and referred to as “HMA” – is the hospital management company with which Alan Levine, Bruce Greenstein’s predecessor as Louisiana Secretary of DHH, worked as Jindal’s healthcare privatization op took shape.  Details of his role in all of this have been presented in an article by Tom Aswell last August, another one I wrote just after (and in which I include the link to Tom’s earlier piece), as well as a later one by the Advocate.  I include myself among those who believe Jindal’s original plan in his hospital privatization push was for HMA to get the state’s hospitals – many say on the cheap – a plan torn to bits by a December 2, 2012 expose by CBS 60 Minutes on HMA which included news of a related federal investigation.  The paragraph in the DHH letter included above seems to confirm the front-and-center role HMA played.  Loud and repeated Jindal administration protestations notwithstanding, HMA’s role was as many others said.

Jindal’s state hospital “privatization” maneuver, it must always be remembered, yielded no private hospitals as they are elsewhere recognized, i.e., dependent upon private sources of money.  In fact, the Biomedical Research Foundation’s Shreveport and Monroe hospitals alone will run through something on the order of $700 million in mainly public money each year.  The public interest is no less at risk than under the previous system supposedly hereby replaced and grandly improved.

As one Biomed insider, also a tested Louisiana political veteran and good friend, noted to me earlier in this saga, even in Louisiana’s legendary history of pols carving-up political hogs, few such chapters dealt with fatter hogs.  Neither, I would add, did any feature more audacious violations of governmental ethics and transparency … much less plain old common sense.

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 sharing – unedited only, please – of his work is requested and appreciated.