Quin Hillyer: Jindal’s privatization was good medicine

Critics of Gov. Bobby Jindal’s privatization of Louisiana’s charity hospital system should be pulling out the salt and pepper right now, preparing to eat their earlier words.

State payments for indigent care through the privately leased hospitals came in under budget this past year, even as services increased and wait times were slashed. Meanwhile, federal government objections to the lease deals seem increasingly likely to be smoothed over, without any doomsday-like interruptions of health care for the poor.

So much for the dire warnings of liberal politicians like state Rep. John Bel Edwards, who ludicrously claimed that what he wrongly described as the feds’ “unequivocal” rejection of the lease arrangement would mean — quite definitively — that “Louisiana’s citizens will lose up to $500 million in federal health care funding.”

First, the budget numbers: From what originally was budgeted for $1.1 billion for the former charity hospitals in the fiscal year that ended June 30, the state spent $52 million less than anticipated. That’s a significant savings (about 5 percent), which provides a nice cushion for the new fiscal year.

Then there’s the improvement in services. The administration notes that private management has opened new urgent care centers in north Baton Rouge and in Lake Charles; a new orthopedic clinic and breast health clinic in Lake Charles; and an additional cardiologist, urologist and family health physician in Houma, along with two new digital mammogram units. In Shreveport and Monroe, MRI appointment times have been cut from more than 60 days all the way down to one to two days, while the total clinic backlog has been reduced from 12,000 patients to 1,800.

Newspapers across the state have noticed, with glowing news stories about specific service improvements appearing in the Houma Courier and the Monroe News-Star — the latter also noting the expected opening in November of a new cardiac catheterization lab at University Health Conway.

As for the dispute with the federal government about the terms of the privatization agreement, Louisiana health department Secretary Kathy Kliebert and Undersecretary Jeff Reynolds told me Thursday that negotiations with officials at the national Center for Medicare and Medicaid Services have put them (Kliebert said) “in a position where, fairly shortly, they can approve our State Plan Amendments.” They called the negotiations “cooperative and positive.”

There remains disagreement over the structure of $312 million in “advance lease payments,” but CMS still has not sent an official “disallowance” notice on that subject, and Kliebert and Reynolds sounded confident of a favorable resolution to that issue, too.

But what most critics missed, even though it was stated twice in the May 2 CMS letter that outlined the feds’ objections to some specifics in the state’s plans, was that CMS does not object to the overall privatization arrangement.

“They have no problem with the state monetizing its assets in this way,” Reynolds said. “They have accepted the basic business model going forward.” In fact, he said, “They considered the old charity system to be a second-class health system. They are seeing that old two-tier system go away, and they are being very supportive.”

If the Kliebert/Reynolds assessment of CMS officials’ attitudes is accurate, it means the basic legality of Jindal’s privatization initiative (advance lease payments aside) was rock solid all along. As for the $312 million in advance payments, it’s not as if the state is likely ever to be forced to write a check that big to the federal government. Indeed, if the privatized system continues to save money for both the state and the feds, most of it could come out in the wash (so to speak), anyway.

Plus, one should never bet against Jindal when it comes to deciphering regulations about health care administration. He is, after all, one of America’s foremost experts on the subject, having been secretary of Louisiana’s health department and assistant secretary of the federal Health and Human Services Department.

Louisiana’s charity hospital system long has been an absolute mess, bedeviling every governor for decades. As Baton Rouge-based blogger Scott McKay accurately described it, “Jindal came along and grabbed it with both hands” — and his solution is working like a charm. It’s about time he gets some serious credit for it.

New Orleans native Quin Hillyer is a contributing editor for National Review. You can follow him on Twitter, @QuinHillyer. His email address is qhillyer@theadvocate.com, and he blogs at blogs.theadvocate.com/quin-essential.