LSU contracts nearing finish

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RICHARD ALAN HANNON /
Advocate staff photo by RICHARD ALAN HANNON -- Senate Committee on Finance chairman state Sen. Jack Donahue, R-Mandeville, listens to testimony Thursday on funding for the state's health care services in the public hospitals.

LSU System Executive Vice President Frank Opelka said Thursday he expects the necessary agreements to be completed in time for a June 24 private takeover of the operations of three more LSU public hospitals.

Opelka gave the Senate Finance Committee an update on the status of deals involving hospitals in Houma, Bogalusa and Lake Charles as the panel continued hearings on Gov. Bobby Jindal’s proposed $24.7 billion budget.

The panel had the LSU Health Care Services Division budget under review. Seven of LSU’s 10 public hospitals fall under HCSD jurisdiction.

All but one of the hospitals are involved in public private partnerships under which LSU gets out of hospital operation and management. Lallie Kemp Medical Center in Independence is the exception.

The budget before the panel has no dollars allocated to LSU for operation of the other six HCSD hospitals. Agreements have been reached involving Baton Rouge, New Orleans and Lafayette but those for Houma, Bogalusa and Lake Charles hospitals are still being negotiated.

“Three more are in the legal writing phase of completing the CEA,” Opelka told the panel.

Opelka said there should be completed documents between May 21 and May 24 that would go to the LSU Board of Supervisors for approval May 28. He said the agreements would be presented to the Joint Legislative Committee on the Budget on May 29. He said the transition date is June 24 for all the deals.

Finance Chairman state Sen. Jack Donahue, R-Mandeville, urged Opelka to get the agreements to the budget committee at least a week prior to the meeting. “We are going to need a minimum of a week or so to have copies of the agreements,” Donahue said.

Opelka said hospital employee layoff plans are set to go before the state Civil Service Commission on June 5 for approval.

State Sen. Ed Murray, D-New Orleans, asked Opelka whether dollars are appropriated for the “legacy” costs associated with the employee layoffs such as unemployment, termination pay and retirement.

Opelka said the expenses are not completely funded.

For instance, termination pay is projected to hit $29 million, of which only $9 million is funded in the current fiscal year budget, Opelka said. Money for the remainder is not in the proposed budget for next fiscal year, he said.

The Finance Committee also heard from LSU Health Sciences Center — New Orleans Chancellor Larry Hollier who complained about unfunded mandates and a net $61.7 million drop in funds in recent years.

“We are continuing to survive but only by decreasing our reserves. We cannot continue that kind of progressive deficit,” Hollier said.