Legislator questions legality of privatization efforts

Privatization of state-run LSU hospitals requires legislative action, and there’s plenty of legal footing to support that position, a New Orleans legislator wrote Attorney General Buddy Caldwell.

State Rep. Jared Brossett, D-New Orleans, made the assertion as he supplemented a request he made last week for an attorney general’s opinion on the issue.

The Jindal administration contends legislative approval is not required as LSU turns over management and operation of LSU hospitals in Lafayette, New Orleans and Houma to private hospitals located in each of those communities. The private hospitals enter into lease arrangements with LSU.

“What we want to do does not require legislative approval. We are certain of that,” said state Department of Health and Hospitals Secretary Bruce Greenstein, who is involved in the privatization deals.

“LSU will continue to own the hospitals,” Greenstein said.

LSU uses cooperative endeavor agreements to carry out the public purpose” called for in the Louisiana Constitution, Greenstein said.

Legislative sign-off on a deal with Our Lady of the Lake Regional Medical Center in Baton Rouge came because LSU was closing Earl K. Long Regional Medical Center, Greenstein said.

A fight is brewing in the Legislature, with some legislators contending they have a legal right to be involved in making decisions that affect constituents and their health

Caldwell’s communications director, Amanda Larkins, said the office has received Brossett’s latest missive.

“It has been assigned to an assistant attorney general for research and drafting,” Larkins said.

There was no indication of how quickly an opinion would be issued.

Brossett cited various Louisiana laws for Caldwell to consider as he shapes his opinion.

“When you juxtapose the privatization efforts as established through the MOUs (memorandums of understanding) against the backdrop of the law governing LSU hospitals in Title 17 it is clear and patently obvious that such action requires legislative involvement,” Brossett said.

That legislative involvement would be in either amending current law to allow the privatization or obtaining approval of the cooperative endeavor agreements, he said.

Brossett wrote that state law says the LSU Board of Supervisors “shall own and operate the hospitals” and that the LSU Health Sciences Center in New Orleans shall be responsible for all programs and facilities in the hospitals.

The memorandum of understanding affecting the Medical Center of Louisiana at New Orleans creates the University Medical Center Management Corporation with the Louisiana Children’s Medical Center as its sole member, Brossett wrote.

The University Medical Center Management Corporation is tantamount to a dummy company with the Louisiana Children’s Medical Center, called LCMC, controlling the proverbial strings, he wrote.

“For all intent and purposes, the LCMC will be taking over the statutory responsibilities of the LSU HSC-N.O., and the (LSU) Board of Supervisors,” Brossett continued.

Brossett said the privatization actions by LSU board “are contrary to law as the board has not sought financial assistance to aid in carrying out its duties but instead seeks to divest itself of complete responsibility to manage” the New Orleans hospital and others.