Political Horizons: LSU board agreements

by mark ballard

Capitol news bureau

It has been an eventful week for the “not like the old days” crowd presently running Louisiana.

Apparently, the irony-impaired LSU Board of Supervisors talked about “transparency” and “best business practices,” even as it approved hospital contracts with few financial details and more than 50 blank pages that will obligate my 12-year-old to pay private companies at least into his early 50s and likely into his late 90s.

The four contracts — involving LSU hospitals in Houma, Lake Charles, Shreveport and Monroe — contain blank pages where lease terms are supposed to go and blank spaces for cost estimates, personnel actions and lease amounts.

After the meeting, LSU board Chairman Hank Danos said the board gave authority to Interim LSU President William Jenkins to sign documents — “substantially in the form presented” — because they trust him. “We have had some assurances that it’s doable.”

Gov. Bobby Jindal wants to privatize all but one of the 10 LSU hospitals that care for the poor and uninsured and provide training to students of medicine and health care. With Tuesday’s approval from the LSU board, seven privatization agreements have been reached.

“It was an egregious act. I think it was illegal. I hope someone challenges them,” New Orleans state Sen. Karen Peterson, who chairs the Louisiana Democratic Party, said from the Senate floor.

“Page 7 says funding is to be inserted by DHH,” said state Rep. Katrina Jackson, D-Monroe.

The Louisiana Legislature gave power to the LSU board to contract on behalf of the university system. “I don’t believe that statutory power can be passed along to the interim president,” Jackson said.

Specifically, Jackson points to contract provisions that, generally, would reimburse 100 percent of the costs of services the private doctors, clinics and hospitals provided to Medicaid patients. Additionally, providers would get paid 100 percent of the costs for services to patients without any insurance.

The state’s taxpayers are guaranteeing payment, she said, and the contracts are for 40 years. The private companies have the option of renewing the contracts for three 15-year terms.

In the past, a drop in revenues was handled by cutting the budget of the public hospitals. That won’t be the case anymore, she said. If something unforeseen happens, like what Congress did in July 2012 by reducing the amount the federal government contributed to Medicaid, “Jindal is promising that we, the state’s taxpayers, will fund the private companies to full extent of the contract,” Jackson said.

“You are about to enter into a contract that will take up a substantial part of your state budget and the LSU board does not see fit to review all aspects of it,” Jackson said, “so that in the event a budget crisis, my question is, ‘What will we have to cut to fully fund our obligations to these private companies?’ ”

Additionally, the federal fund that pays for medical care provided patients without insurance is going away. It’s one reason why the federal government has offered so many financial incentives for states to expand the qualifications and increase the Medicaid rolls to include those who make too much for the government insurance policy but too little to buy adequate coverage.

An estimated 300,000 people in Louisiana have no insurance.

“We’re greatly concerned about how they are going to fund this deal into the future,” said Jan Moller, director of the Louisiana Budget Project, a nonprofit group that researches the impact of financial policies on low- and moderate-income people.

Moller said that with the last-minute budget finagling, the Jindal administration was able to find enough money for privatization this year. What happens next year and the year after? What happens when the federal government stops paying for uninsured patients?

In the end, Moller said, Louisiana will have hospitals, managed by private companies, that handle uninsured patients. And Louisiana will have hospitals that treat patients with insurance, private and Medicaid.

It’s a two-tiered system that has been in place since Huey Long, he said.

“Are they going to have enough money to sustain this model in the long run? And why isn’t Gov. Jindal thinking about a system to replace this?” he asks.

Mark Ballard is editor of The Advocate Capitol news bureau. His email address is mballard@theadvocate.com.