Ex-Jindal health chief denies he urged LSU action
A former Jindal administration health chief was quoted in an LSU document released late Thursday as recommending LSU sell its hospitals in Shreveport, Houma and Bogalusa to help generate state dollars to fund Medicaid.
But Alan Levine, now an executive with Health Management Associates Inc., said in a Thursday interview that he was misunderstood.
Rather than selling, Levine said he recommended to LSU officials that the hospitals be leased to private entities as a way to increase revenue. He said the arrangement would also lead to improvements at the hospitals as the private firm puts up money to keep them updated.
“I don’t think you would want to sell them. They are important assets,” Levine said.
Levine met July 17 with top state health care and LSU officials, including members of the LSU System’s Board of Supervisors.
“The sale versus lease and cooperative endeavors, all of those were discussed in a spectrum of things that could be considered,” LSU System Vice President Fred Cerise said Thursday. Cerise said LSU favored models under which it would retain more of a partnership with a private entity.
The undated memo was written to LSU System President William Jenkins by Cerise, who oversees health affairs and medical education. It was acquired with a public records request.
The meeting with Levine occurred as LSU struggled with how to absorb some $320 million in Medicaid budget cuts in its 10 hospital system.
The cuts were imposed by Gov. Bobby Jindal after a sudden loss of federal funding support. The LSU Board on July 27 approved a plan of reductions and implement reductions in medical programs and services throughout the system to cover much of the lost revenues.
With the immediate financial crisis addressed, Cerise said the LSU Board is looking at a variety of public-private partnership options for the future.
Levine’s firm Health Management Associates Inc., based in Naples, Fla., has been active in partnerships with schools of medicine in Florida and Mississippi. He resigned as state Department of Health and Hospitals chief about two years ago.
Levine said he was invited by some LSU board members to give advice and was not representing his company.
According to the LSU memo summarizing the meeting: “He (Levine) stated that the purchase of an LSU hospital would generate revenue that the state could use to match in the Medicaid program. He recommended as an initial step that LSU sell its hospital in Shreveport and use the proceeds to offset the budget cuts for the rest of the LSU system.”
Shreveport is the home of one of LSU’s medical schools.
The memo stated that Levine suggested that the hospital buyers would form a joint venture with LSU, invest capital into the facility and develop a strategy for LSU “to more aggressively compete in the hospital market.”
According to the memo, Levine also stated that he believes there would be opportunities with a capital partner to purchase additional hospitals such as East and West Jefferson or Terrebonne General and manage them in a joint venture with LSU.
“The LSU board members present indicated they want LSU’s management to pursue this strategy,” Cerise said.
The LSU board members present were Rolfe McCollister, Bobby Yarborough, both of Baton Rouge; John George, of Shreveport; and Scott Ballard, of Covington.
According to the memo, Cerise indicated that he was concerned that the strategy that Levine suggested would “take a lot of time to develop and that LSU would likely need to go through a competitive public procurement process and likely legislative approvals.”
In a subsequent memo to Jenkins, Cerise wrote he was concerned about the proposed Shreveport hospital sale during the current state budget year that began July 1.
“There is no commitment by DHH to mitigate the budget reduction while we work on the very complex Shreveport deal,” Cerise wrote. “Therefore, if later in the year, we realize that we cannot close a Shreveport sale by year end, we will run a deficit, which is against the law, and grounds for removal of those causing the deficit.”
Cerise also predicts “a significant negative community reaction” on several fronts, including using hospital sale proceeds on LSU hospitals in south Louisiana.
On Thursday, state Sen. Sherri Smith Buffington, R-Keithville, said she had heard rumors of discussions about a Shreveport hospital sale.
“Certainly the Health Sciences Center in Shreveport is such an important part of the northwest economy I certainly feel strongly these discussions should certainly be taking place with the community leadership here,” said Buffington, who is vice chairwoman of the Senate Health Committee.
The meeting also featured a discussion of cost-saving measure the board had requested from LSU executive hospital executives to make up for the Medicaid funding hole. Five scenarios were discussed.
One scenario, according to the memo, would have redistributed DHH cuts and bridge LSU to 2014 “at which time the Medicaid expansion would provide significant financial relief as a way to sustain services and training programs.”
The Medicaid expansion is a part of the Obama administration’s national health care revamp and would cover people with incomes up to 133 percent of the federal poverty level. The memo stated that the proposal was “immediately rejected” by DHH Secretary Bruce Greenstein. Greenstein agreed to work with a consulting group on “possible sources of additional federal funding,” Cerise’s memo to Jenkins stated.