The LSU Board of Supervisors will consider two proposed agreements on Wednesday that would strip their oversight of public hospitals in New Orleans and Lafayette, moving control to nonprofit hospital companies. In New Orleans, the nonprofit that runs Children's Hospital and Touro Infirmary will take over operations of the Interim LSU Public Hospital and, eventually, the $1.1 billion facility...
The LSU Board of Supervisors will consider two proposed agreements on Wednesday that would strip their oversight of public hospitals in New Orleans and Lafayette, moving control to nonprofit hospital companies. In New Orleans, the nonprofit that runs Children's Hospital and Touro Infirmary will take over operations of the Interim LSU Public Hospital and, eventually, the $1.1 billion facility under construction in Mid-City.
State and LSU officials are moving the proposed agreements quickly, hoping to transfer hospital operations by the end of June. A spokesman for Louisiana Children's Medical Center on Tuesday said they are currently on track to meet that deadline.
The shift means that employees of the LSU hospitals will lose their jobs, along with state benefits, though they are free to reapply for them. Around 2,000 employees have submitted applications to work for the privately operated hospital, said Brian Landry, a Children's spokesman.
As part of the deals, Louisiana Children's Medical Center agreed to make lease payments for the hospitals. That money will be used to obtain the federal matching funds that pay for the free health care for the poor and uninsured that is delivered at the safety-net hospitals.
The exact amount that the company will pay is apparently not worked out; a draft lease agreement posted on the LSU Board of Supervisors website notes the sums are "under discussion and subject to final agreement on appraisals." The annual payment listed in the agreements would be $19.5 million for the interim hospital, growing to $62.4 million when the new hospital under construction in Mid-City is completed.
The new hospital, previously named the University Medical Center, is the long-awaited replacement for "Big Charity," the downtown hospital scrapped by LSU after Hurricane Katrina. Under construction between Tulane Avenue and Canal Street, the new hospital is expected to open in 2015.
As part of the deal, the new operators will put up $253 million to build an ambulatory care building and a garage. That investment will serve as an advanced lease payment.
The push to privatize the LSU-run public hospitals came in response to the steep federal Medicaid cuts this summer, which caused cuts across the system to provide health care to the poor or uninsured. The LSU system took a large share of the cutbacks.
There are currently initial deals for local nonprofit hospitals to take over LSU hospital operations in Houma, Lafayette and Lake Charles.
Last week, the Joint Legislative Committee on the Budget, which includes members of the House and Senate appropriations panels, considered revised agreements to close down Earl K. Long Hospital in Baton Rouge, shifting safety-net care to Our Lady of the Lake Medical Center starting on Monday.
While the move had been in the works for several years, prompted by the inadequate facilities at the Baton Rouge public hospital, it was expedited by LSU and Gov. Bobby Jindal's administration because of budget concerns.
Baton Rouge lawmakers last week angrily complained that the rushed process left them with questions about access to mental health care, women's services and care for prisoners.
Dr. Frank Opelka, who took over management of the LSU system in the fall, said the Medicaid cuts required that these deals be made swiftly.
"When you weigh all the demands, in a perfect world it would be nice to get all the time you need to get everything as you wish," he said. "But patients would not have access to care and graduate medical education would suffer if we made the perfect the enemy of the good."
The Joint Budget committee ended up voting to approve the Baton Rouge transfer, with local lawmakers saying they felt their hands were tied. Both the Jindal administration and Sen. Jack Donahue, R-Covington, said state law does not require the panel to vote on the other agreements because, unlike in Baton Rouge, none of the public hospitals will be closed.
However, on Thursday, the Senate without debate approved a resolution by Sen. Ed Murray, D-New Orleans, requiring that the deals come before the Senate Finance Committee for a vote once they receive the expected approval of the LSU Board of Supervisors.
Opelka and a representative for the state Department of Health and Hospitals did not immediately return requests for comment from the Associated Press about whether they will comply with the resolution.
The Associated Press contributed to this report.