Public-private partnership talks are under way in connection with LSU’s operations at its two smallest hospitals in the wake of a Jindal administration directive to look at new, more-efficient, less-costly models of care delivery.
The overtures involve Lallie Kemp Medical Center, in Independence, and W.O. Moss Regional Medical Center, in Lake Charles. The discussions with community hospitals in those areas are coming down to dollars and cents and how to preserve uninsured care.
The threat of change has already prompted a group of Lallie Kemp supporters to seek a permit to rally at the State Capitol on Thursday.
The talks are just the beginning of LSU’s exploration of potential cooperative endeavor agreements, leases and possible sale of some facilities in the system of 10 public hospitals.
“We have to go to our other hospitals,” LSU System President William Jenkins said, specifically mentioning those located in Bogalusa, Houma and Lafayette. “We are continuing to investigate what the landscape is going to be, where we can get help from the provider community and community hospitals given the disproportionate share (uninsured care) dollars are going to become less and less available.”
The LSU hospitals and its medical clinics are the state’s predominant deliverer of health care for the poor and uninsured. Dollars for that care continue to shrink because of Gov. Bobby Jindal’s budget policy decisions and changes coming on the federal front.
Community hospitals agreeing to take LSU’s Medicaid and other insurance-covered patients is much easier than “taking our patients who are uninsured,” Jenkins said.
Another lingering question is how LSU’s outpatient clinics would be financed without their connection to the hospitals.
“We have to have the hospitals for our reimbursement so we can pay for our outpatients, most of whom are not insured,” Jenkins said.
LSU had been facing a more than $300 million cut in the dollars it receives for uninsured care as Jindal cut $522 million for health care spending after a sudden reduction in federal Medicaid funds. The system found a way to fill about 80 percent of the funding gap and avoid hospital closures.
But the hospitals must still implement up to $50 million in cuts and, if state surplus dollars do not materialize by October, the Jindal administration has said there will be more cuts in dollars for uninsured care.
LSU System Vice President Fred Cerise said officials are initially focusing on Lallie Kemp and W.O. Moss because “that’s where we have the more immediate problem because of budget hits” and solutions need to be found quickly.
The two hospitals received a greater proportion of cuts because they do not house physicians in training or graduate medical education programs, which were protected.
Cerise said data is being exchanged on patient volumes and how much the private hospitals would need to get paid for taking patient loads. Financing arrangements are complicated, he said.
Discussions involving Lallie Kemp have been held with administrators of North Oaks Medical Center, in Hammond, and Hood Memorial Hospital, in Amite. At W.O. Moss, LSU officials have met with Lake Charles Memorial and Sulphur’s West Calcasieu Cameron Hospital administrators.
Initial meetings have included area legislators, some of whom are skeptical of how the public-private partnerships will continue to deliver the care their constituents are accustomed to.
“If you deliver services in local communities where people are used to going, you prevent the clogging of emergency rooms,” said state Rep. Chris Broadwater, R-Hammond. “We cannot lose the opportunity for those individuals to get access to that critical care. That’s non-negotiable.”
Lallie Kemp has 80,000 outpatient visits annually.
Broadwater said provision of care for the uninsured is key. He said a lot could depend on whether the state decides to embrace the federal health care revamp’s expansion of Medicaid, which would provide many of the state’s uninsured with government insurance. That could change the level of interest, Broadwater said.
Jindal has rejected state participation.
State Sen. Ben Nevers, D-Bogalusa, said the question of the hospitals looking at a partnership with Lallie Kemp is “who is going to pay and how much?”
“Naturally they are interested in trying to meet health care demand in their area, but the bottom line is do you bankrupt them? Let’s face it. They can’t do it for free,” he said.
Nevers said a comparison needs to be done on Lallie Kemp and other area hospital costs.
Nevers said there are 600 oncology and HIV-AIDS patients who receive care through Lallie Kemp. “It would be devastating for that population if they could not get those services in close proximity,” he said.
State Rep. John Bel Edwards, D-Amite, said 54 percent of the people who go to Lallie Kemp are uninsured.
“Why take over an operation when you know 50 percent are uninsured?” Edwards asked, noting that more cuts to uninsured care could be coming this year and federal health care financing changes will take more dollars away.
Edwards noted that state health chief Bruce Greenstein points to LSU’s partnership with Our Lady of the Lake Regional Medical Center in Baton Rouge as an example of the models that can be successful. But Edwards said a key part of that arrangement has yet to the finalized: the funding mechanism for LSU’s outpatient clinics where a lot of uninsured care is delivered.
“The model is not yet viable because we don’t have permission (from the federal government) to do the one at the Lake,” Edwards said.
The Lake is scheduled to become home for LSU’s medical education and inpatient care in 2014 with the closure of Earl K. Long Medical Center in north Baton Rouge.
In Lake Charles, House Speaker Chuck Kleckley, R-Lake Charles, said a plan is being discussed under which a private sector partner would take over inpatient hospital care and Moss would continue to deliver outpatient services to the 120,000 people seen annually.
“This thing is so complicated but some of my local hospitals feel pretty confident. Every time I sit down with a health care provider, administrator, somebody with DHH or LSU, I learn something new. It’s not a very simple solution. There’s a lot of difficult issues out there,” Kleckley said.