Gov. Bobby Jindal's push to privatize the Louisiana's charity hospitals could put an extra $6 million in state coffers, but only if private health care providers in New Orleans and Shreveport honor financial pledges not spelled out in the partnerships' respective legal agreements. Jindal administration representatives, at a meeting of the Joint Legislative Committee on the Budget in Baton...
Gov. Bobby Jindal's push to privatize the Louisiana's charity hospitals could put an extra $6 million in state coffers, but only if private health care providers in New Orleans and Shreveport honor financial pledges not spelled out in the partnerships' respective legal agreements.
Jindal administration representatives, at a meeting of the Joint Legislative Committee on the Budget in Baton Rouge on Friday, told lawmakers they expect the privatization of nine state charity hospitals to yield a surplus.
The statement came just days after the Legislative Fiscal Office (LFO) said its lease payment calculations showed the privatization of the facilities would bring in $39 million less than initially budgeted for this year.
Kristy Nichols, Jindal's commissioner of administration, said Friday the discrepancy is because the LFO used different calculation methods, adding the perceived financial "gap" would be covered by extra funds brought in from agreements between private providers and LSU Interim Hospitals in New Orleans and LSU Medical Center in Shreveport.
The first would involve Children's Medical Center, the private entity taking over the LSU Interim, making double lease payments in the amount of $68 million in 2014.
For the Shreveport hospital, the state is working out a 12-month lease payment arrangement, rather than a nine-month deal, with the private provider, the Biomedical Research Foundation of Northwest Louisiana, for the first year of operations. Doing so would add a further $9.6 million.
All told, rather than a $39 million gap, the privatization efforts would instead net a $6 million surplus for the state, Nichols said. State Fiscal Analyst Alan Boxberger told lawmakers he agreed there would be a surplus, but only if the private entities lived up to these agreements.
At issue, while there's an agreement in principle for a double lease payment, the document has not been signed by officials at Children's. Moreover, the state has yet to finalize details on the 12-month lease payment with the group in Shreveport.
Boxberger said that while the LFO has no reason to doubt the public entities will honor their tacit agreements with the state, he is urging that these deals be made official to end speculation.
The discussion of the shortfall came during a committee hearing meeting in which legislators discussed the final hospital privatization deal in Pineville. The deal with involve the eventual close of Huey P. Long Medical Center and the shifting of those services to clinics operated by CHRISTUS Health Central Louisiana and Rapides Healthcare Systems.
The closure of the Pineville charity hospital would require legislative approval. State Rep. Katrina Jackson, R-Monroe, expressed concern with the closure and said she expected legislative opposition to the move.