Update given on hospitals budget

The LSU Board of Supervisors on Friday got a promise from its top health executive that the plan for closing a $300 million-plus hole in the LSU hospital system budget is coming together.

“In the weeks ahead, LSU Health hopes to bring forward a series of preliminary considerations for your review and direction,” LSU System Executive Vice President Frank Opelka wrote in an email message explaining his absence from the board meeting.

LSU board health committee chairman Dr. John George, of Shreveport, read to fellow board members part of the message, in which Opelka begged off giving an update, citing “important conflicts” related to negotiations with private partners to take over operations of some LSU hospitals.

“LSU is aggressively working with DHH (state Department of Health and Hospitals) and serious potential partners to consider a framework for the preliminary review,” Opelka wrote. “The framework would preserve and grow clinical care, secure graduate medical education and meet the fiscal restraints placed on the LSU delivery system.”

Opelka said he would be presenting “more details” to the board soon.

An announcement could come as early as next week on a private deal involving lease and operation of LSU’s Interim Hospital in New Orleans and the $1.1 billion academic medical center complex under construction there.

Negotiations have been ongoing with Children’s Hospital, which also owns Touro Infirmary. LSU graduate medical education and physicians-in-training programs already have alliances with both.

The LSU Board had approved a plan calling for the layoffs of some 1,500 employees as well as reductions in services at seven south Louisiana hospitals to help close about half the budget gap. The remainder was to be filled through deals with private hospitals.

The budget hole, created when Congress reduced federal support for Louisiana’s Medicaid program, must be filled by June 30 — the end of the current state fiscal year.

Opelka told legislators in another email earlier this week that nearly all the layoffs — scheduled for Jan. 21 — were on “temporary” hold pending negotiations with private partners. There was no explanation given on how LSU planned to balance the hospitals’ budget without the layoffs and service cuts.

Opelka has confirmed that leasing hospitals to private entities is under discussion. Advance lease payments would become state dollars that could be used to draw down several times the amount in federal funds.

In an interview, state House Appropriations Committee Chairman Rep. Jim Fannin said he did not know LSU’s plans.

He said delaying layoffs would increase costs and could result in deeper cuts unless
off-setting revenues are identified.

“The longer we hold off on getting all these decisions made, it’s having a cost,” said Fannin, D-Jonesboro. “Revenues could pull us out of some of this stuff ... We do know we have until June 30 to balance the budget.”

Opelka noted the layoff decision in his email sent to George, LSU board Chairman Hank Danos and LSU System President William Jenkins. George read part of the correspondence in the board meeting. He initially refused to publicly release the email.

“The remaining layoffs at specific hospitals are on hold at the request of several possible LSU Health partners,” Opelka wrote. “The LSU Health partnership discussions are on tight schedule in order to provide the board with timely information for your review. In order to keep the partnership on track, I request your patience and understanding in my absence so that we can stay on our schedule. I look forward to bringing more details to you soon.”