Budgets for public hospitals depend on privatization agreements

Legislators question moving forward

“I’m afraid if we’re in negotiations we may get picked like a buzzard does a dead animal.” State Sen. Francis Thompson, D-Delhi

E.A. Conway Medical Center in Monroe would receive funding for three months of the year under Gov. Bobby Jindal’s $25.7 billion proposed state spending plan.

Jindal plans to turn eight public hospitals in Louisiana over to the private sector in a move he contends will save the state money.

But partnership agreements are only in place for five of the hospitals. And those agreements are not final.

The budget the Jindal administration presented to legislators Friday assumes the partnerships will take place. The presumption troubled legislators during the budget presentation.

“I’d be foolhardy to say, ‘Hell, I’m sure it’s going to work out,’ ” said state Sen. Francis Thompson, whose district includes the Monroe hospital.

Ten public hospitals in Louisiana provide care to the uninsured, either through the oversight of LSU Health Care Services or the LSU system.

In a move that could eliminate thousands of state government jobs, Jindal is restructuring the state’s public hospital and graduate medical education system.

Management for most of that system would shift to the private sector, which would receive public dollars to care for patients and would pay the state lease payments for facilities under the plan.

The Jindal administration contends the private sector is likely to employ most of the impacted hospital workers.

Patients and medical education programs at the LSU Earl K. Long Medical Center in Baton Rouge will move to Our Lady of the Lake Regional Medical Center.

Leonard J. Chabert Hospital in Houma will partner with Ochsner Health System and Terrebonne General Medical Center.

Similar arrangements are planned for public hospitals in Lafayette, Lake Charles, Monroe, Pineville, New Orleans and Bogalusa.

In preparing his proposed budget for the fiscal year that starts July 1, the governor gutted funding for the LSU Health Care Services Division, which is responsible for seven hospitals, including Earl K. Long Medical Center in Baton Rouge.

From a spending plan of $825 million Dec. 1, the division’s budget would shrink to $45 million in the upcoming fiscal year, according to the budget documents.

The budget for the LSU system, which has three public hospitals, would drop from $1.4 million on Dec. 1 to $827 million as Huey P. Long Medical Center in Pineville and E.A. Conway shift to private management.

With the private sector managing the hospitals, the facilities no longer would need sizable allocations in the state budget.

The lack of finality on the private-public agreements dominated legislators’ questions about the proposed budget.

Jindal was not present for the discussion.

Instead, Commissioner of Administration Kristy Nichols tackled the concerns, at one point correcting herself when she mispoke about how much money actually is in place from the partnerships.

Nichols said financial agreements on several of the partnerships will be available April 1.

State Sen. Norby Chabert, R-Houma, characterized the restructuring as what is glaring in the budget.

“It’s going to be a tremendous change. It’s not going to look like anything we’ve seen before,” he said.

The public hospital in Houma is named for Chabert’s father.

Thompson, D-Delhi, asked how negotiations stand on E.A. Conway in Monroe, saying he did not want to go home thinking he had a hospital only to find out he no longer does.

The Jindal administration only provided funding for the Monroe hospital for a quarter of the upcoming fiscal year in anticipation of finalizing a deal with a private partner.

Barry Dussé, state director of planning and budget for the Jindal administration, said the funding should last three months.

“I understand negotiations are going well for hospitals taken out of budget,” he told Thompson.

Thompson said that wasn’t a good enough answer for him.

“Public hospitals are gone after this budget. Finished. Over. Do not exist. Is that accurate?” he asked.

Nichols said public health services will be alive and present, just provided through a different model.

Thompson said the Jindal administration should try a different approach to putting together the budget. He said the public should be concerned about the proposal.

“I’m afraid if we’re in negotiations we may get picked like a buzzard does a dead animal,” Thompson said.

State Sen. Mike Walsworth interjected, saying he could just see the next day’s headlines.

Walsworth, R-West Monroe, said Conway will remain open, regardless of whether or not a contract is in place.

Later in the day, state Department of Health and Hospitals Secretary Bruce Greenstein said he is counting on the agreements materializing.

“I’m very confident,” he said. “We’re in the advanced stages of discussions.”

Comments

1) Comment by GardenVariety - 24/02/2013

You can say that again, teacherguy!!!

2) Comment by teacherguy - 24/02/2013

Why were state run hospitals "invented" in the first place? 1. Because private hospitals did not, would not, could not provide services to the poverty stricken adequately. 2. Job creation and health services for smaller parishes where private hospitals refused to set up shop. I must agree with @whodat70816...MANY of my friends could not fathom why I would vote for that democrat teacher lady for governor because as they said, "Everyone is voting for Jindal." Teachers voted for Jindal! Hospital workers, prison employees, and their families voted for Jindal...and then when he "all of a sudden" started stabbing them all in the backs...they acted like it was the first time they ever heard of his plans????? The ignorance and stupidity of the ALL makes me smile a little bit, too...maybe people will quit voting the popular choice in the future??? Probably not, but it makes me hope they can learn from their mistakes...because it does no good to TEACH them from an early age to RESEARCH candidates...people are too LAZY, or blind, to do that....

3) Comment by zealer99 - 24/02/2013

"Civil service rules make it difficult to remove problem employees, because they enjoy "classified" status protection. "Difficult to remove but that is why competent managers should be hired and not political appointments. I have worked in the private and public sector and people are people, there is nothing that makes a person in either sector a better or worse employee, problems arise when the management personnel are incompetent or lazy and when they shower their friends and relatives with obvious favoritism. I have built two houses over the past 20 years and the number of incompetent and inconsiderate people that I have encountered boggles the mind. As I said before, people are people and most people try to "run with the herd" by complying with what management expects of them. There are exceptions and natural forces usually pick them off.

4) Comment by bettergovt - 24/02/2013

Your are correct a private enterprise does have more of an incentive to cut cost but do not mistake that for reducing costs to the medicaid program. The only reason to reduce costs is to maximize profit but that does not benefit the taxpayer or the patient. They will maximize profit for their investors. Private businesses will bill the state for every penny possible within the law and, in some cases, a few outside the law. Every instance that I have witnessed of privatization of a function that was previously run by a public entity saved money for the taxpayer for no more than 3 years. After that, contractor bids far exceed what the function cost the taxpayers under the old way. Time after time, contractors will bid low to get the job but once they have it, the bids start skyrocketing. The right campaign contributions are made and all of a sudden a competitive bid process isn't so competitive. If you really want to improve the process make it illegal for politicians or appointees to accept contributions or jobs from contractors and vice versa. Just take a look of the situation at DHH with their secretary.

5) Comment by whodat70816 - 24/02/2013

The only good thing about all of this privatization is many who will be laid off and those that are forced to take lower pay with the private company probably voted for Jindal.....that little fact makes me smile a little.

6) Comment by Schmatzo - 24/02/2013

Just a note regarding this issue. State hospitals have enjoyed the privilege of government funding and lifelong affiliation with well respected medical schools. Over time, with increasing budgets, layers of management expanded, nurses and other critical personnel enjoyed generous amounts of overtime in jobs that were practically guaranteed for life. Positions for executives, medical directors, and staff grew with little oversight as to necessity, nursing management and supervisor staff stayed on years after retirement age in many cases, in jobs that could have been performed by competent managers at a lower salary, years their junior, not to mention the mushrooming pension liabilities that grew with these "lifetime" positions. Civil service rules make it difficult to remove problem employees, because they enjoy "classified" status protection. Employees in the private sector are subject to "at will" laws of our state. Private hospitals, are under more incentive to deliver services in the most efficient ways possible, with the least amount of overhead and red tape. Patients will receive the excellent care that they are entitled to, but you are less likely to encounter a patient who is in a hospital room for 6 weeks walking a block to the store every day, to shop, and return to his room like a person in a boarding house. Trust me, no one is being thrown under the bus here.

7) Comment by bettergovt - 24/02/2013

From years of experience from both sides I will say this: Government CAN do any task for less than the private sector. The simple reason is profit motive. If you hire the same people, pay the same amount, and hold both to the same standard, the ultimate outcome will be government can do the same work for less. In reality does it happen? Sometimes. The problem is all of the kinfolk/freind deals and jobs that are handed out on both sides. Government likes to grow but no more than the private sector likes to grow. Everyone wants to be in charge of bigger and bigger operations. I see it everyday. The problems is the spoils system of government we have. The winners get to rape the city/state/country as long as they can stay in office. You have to take care of the people that gave you the money to get elected. People see themselves as the owners of government but what they really are is the customers of government. The owners are the ones that pay for something and that is the politician's major contributors. I put "major" because unless you donate thousands each year you won't be able to get most politicians on the phone. Wasn't it Roemer that said government isn't broke it's baught? I agree 100% no matter which side wins.

8) Comment by GardenVariety - 24/02/2013

Connect dots to Guv Stoopid Parti's tax "plan." House o' cards, my friends, house o' cards. If Guv, his staff and operatives, as well asmany legislators (Republican AND Democratic), don't end up in jail at the end of this horrid movie, then shame on the majority of Louisianans--the ones who voted for the cretins and the ones who didn't stand up to them.

9) Comment by twinkie1cat - 24/02/2013

zealer99: Jindal CLAIMS to have been born in Baton Rouge to 2 immigrants from India. He also was a Hindu until he decided to change to being a Catholic as a young adult. He still has relatives in India. Isn't it strange how birther questions never come out about oddly named conservatives (legally Piyush Jindal), but our president, even knowingly with a full blooded American mother with full blooded American parents and who is a Christian is still being dogged about his birth place after 5 years in office?>>>>>>>>>>>>>>>>>>In any case, a person is strongly influenced in their own values by those of their parents. India has a long history of discrimination against the lower social classes. It took a nun from Romania (I believe that was her home country.) to quite literally reach out and take the poor and dying off the sidewalks. That was Mother Theresa. So it seems to me that Piyush has simply adopted the culture of the country of his parents when he cuts out EVERYTHING that benefits people who are underprivileged.

10) Comment by zealer99 - 24/02/2013

"why can't the state operate the same entity and make/keep that profit? " How can a private company use the same labor pool and operate more efficiently? The State makes operational procedure and appointments to higher level positions based on politics rather than ability.

11) Comment by RODEO CLOWN - 24/02/2013

IA private, for profit company will not sign a contract obligating the company to provide services unless a profit is part of the contracted obligation. Private companies does not knowingly sign a contract with the intention of losing money-that is a given. If a for profit company is willing to assume a previously state operated entity, be it a hospital, prison, education, for a profit, why can't the state operate the same entity and make/keep that profit? Therefore, if a private company sees a profit is obtainable through assuming responsibility for any given governmental service, why would the state willingly “give away” profit derived from the service? Privatization make even less sense when one realizes the state has not done away with the expense associated with the privatized entity. The state still has to pay for the operation via a contract signed with the respective company. So in essence, the cost does not go away but is contracted out to a private, for profit concern and will ultimately cost the state more.

12) Comment by swinham - 24/02/2013

Can you say, "half-baked"?

13) Comment by jwarren - 24/02/2013

Interesting how easily Jindal's minion Walsworth lies and says Conway will stay open whether a contract is in place or not. I wonder if he would care to explain where the money would Come from to make that happen.

14) Comment by IMVOR - 24/02/2013

I wish someone would explain how these private interests are going to profit from these hospital "partnerships" if the state is throwing more people off the Medicaid roles. Where are private hospitals going to make up the cost of treating the uninsured poor (and there are a lot of them in Louisiana) with fewer Medicaid dollars available for reimbursement. Are they simply going to allow people to go untreated? Having people running around with untreated diseases seems like it would be a hazard to the population as a whole. I don't grasp the benefit in this plan for anyone.

15) Comment by crazycajun - 24/02/2013

The employees of Conway and any other Charity facility better be aware that they ALL will be laid off. Of the fraction that will be rehired will have to work for a much smaller salary.That is exactly what is going on with the OLOL and EKL situation. Imagine not getting raises for five years then taking a minimum six dollar an hour cut in pay. This will not only affect you now but will affect how much you receive in retirement also. Remember for future reference that this is not a just a L'il booby thing but a republican party action. If you voted republican you voted to have this happen toyou.

16) Comment by zealer99 - 24/02/2013

"The poor can just lie dying in the streets like they do in Jindal's home country of India " I thought Jindal was born in the United States?

17) Comment by bettergovt - 24/02/2013

The fact that there is no reduction in Medicaid reimbursement rates is suspicious. We lose all of the federal money from a reduction in federal match and there is no reduction in rates? Previously the state used money spent running the state hospitals as state match for the federal money so the money saved by privatizing the state hospitals is not a net gain. They have all of these deals in the works with private hospitals to take over what basically amounts to medicaid patients. The administration cannot reduce the match during these negotiations because it will jeopardize the deals. Knowing this administration's history of mid-year cuts, what do you think will happen in January when they realize that not all of these contingent savings work out? They will have to cut medicaid reimbursment rates mid-year. Now the hospitals that made the deals with the state are screwed. They took on all this extra medicaid liability only to find out that they won't be getting paid what they thought they would. This budget is pure fiction. He still has vouchers being paid out of the MFP funds even after the court ruled against him. Yes, he is appealing to the state supreme court but that is beyond contigent thinking. That is "hope and a prayer thinking". If the case was pending, fine, but the ruling is currently in favor of the 40-something local school boards against the state. To just assume it will all be overturned in your favor is not enough to put it in the budget. When the school boards when the money for vouchers will have to come from somewhere. What about all of the sales of the state buildings/property? You think that all of those deals will work out for the numbers in the budget? What about all of the tax reforms? You think they will all work out exactly accurate? I predict that these private hospitals will be the next victims of ambition.

18) Comment by twinkie1cat - 24/02/2013

The same thing will happen as happens with all "privatization", lower qualilty services which will be virtually unregulated just like the charter schools, the price of which will keep going up, putting the state in debt, the uninsured (thanks to Jindal's refusal to participate in Obamacare) being given huge bills they cannot afford to pay so they lose their homes and property. Meanwhile the former state employees are only partially employed by the for-profit hospitals, lose their state benefits and work for minimum wage. And just like the teachers, the experienced nurses leave only to be replaced by private vocational school graduates from for profit schools. By the time the s---- really hits the fan Jindal will be out of office and immune from the mess he created. We are already seeing it with pregnant women having to walk from the last bus stop to Women's Hospital. The poor can just lie dying in the streets like they do in Jindal's home country of India while he tricks America into hiring him for some high federal position.

19) Comment by Terd Handler - 24/02/2013

More smoke and mirrors to sell Jindal's grand illusion!

20) Comment by lovemykids - 24/02/2013

Don't worry Jindal knows what he is doing. Has he not already proven that he is the greatest? HAHAHAHAHAHA

21) Comment by zealer99 - 24/02/2013

It sounds like selling the farm with plans to rent it back and save money. I would be willing to bet that the overall cost increases and services are cut to balance the cost.