An analysis is being done to determine whether more can be done now to move the hospitals toward the ultimate goal of ‘partnering with the community’ to provide a sustainable health care delivery system.
The new LSU System health chief said Tuesday he asked administrators of seven public hospitals in south Louisiana to submit budget-cutting scenarios that would slash funding by 34.5 percent, reduce inpatient beds or a combination of the two.
The directive went to LSU hospital administrators and medical directors in Baton Rouge, Lafayette, Houma, New Orleans, Independence, Bogalusa and Lake Charles.
Under one scenario being considered, six of the hospitals would become shell facilities with 10 beds for patients. The only exception would be the interim LSU hospital in New Orleans, which would keep 150 beds.
In July, the LSU Board approved a budget-cutting plan that included employee layoffs and elimination of some services.
The LSU hospital system had faced a more than $320 million cut because of an unexpected reduction in federal Medicaid funding. The dollars represented about one-fourth of the budget for the hospital system, which cares for the poor and uninsured and serves as the training ground for Louisiana’s future physicians.
The since-departed LSU health leaders, in conjunction with the Jindal administration, identified “one-time” money to offset 80 percent of the cut.
Frank Opelka told the LSU Board of Supervisors last week that he wanted to review the budget reduction plan, released July 27, to determine if the system could go further as it moves more toward private sector involvement. He was named Aug. 24 as the LSU System executive vice president for health care and medical education redesign.
Opelka said Tuesday the scenarios he wants to consider were developed in July when the system faced the $320 million in cuts.
“We are gathering information right now. There was a reduction plan put forward and approved,” Opelka said. “Was that the right reduction plan or should there be a different reduction plan?”
Opelka said hospital cuts in July were cushioned with the use of one-time money, funds that “won’t be there again, so that bridge will be burned. ... There will just be cuts to make.”
Opelka said meetings have started between hospital administrators and executives of the LSU Health Care Services Division, which oversees seven of LSU’s 10 hospitals.
“We have been sitting down with them, thinking with them about all the possible opportunities, who are the private partners, what relationship do we have with those partners,” Opelka said.
Also on the table is the protection of graduate medical education programs during the reviews, he said.
“There’s no decision to move off the current plan. We are going through a very difficult exercise to determine whether we need to change course,” Opelka said.
Any potential changes would be reviewed by state Department of Health and Hospitals Secretary Bruce Greenstein to determine if an alternate plan is worthwhile, Opelka said.
An analysis is being done to determine whether more can be done now to move the hospitals toward the ultimate goal of “partnering with the community” to provide a sustainable health care delivery system.
“We could be looking at partnering to keep some of the institutions going ... in joint ventures,” he said.
When faced with a more than $320 million cut, the LSU board had asked for a plan that cut 34.5 percent at each hospital, did not close any hospital or hospital emergency room and kept graduate medical education programs intact. Legislative approval is required for closing a hospital or emergency room or cutting the budget by 35 percent or more.
At the time, then-LSU System health care chief Fred Cerise said, “We came up with the cut scenario but the other things wouldn’t work.”
Cerise said residency programs at Earl K. Long, Bogalusa and Chabert would have been lost and “the cuts were drastic.”
The LSU board then changed course and with administration support identified one-time revenues to close much of the hole. The idea was to give the LSU hospital division time to pursue public-private partnerships, selling or leasing hospitals and other models.