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Itís a financing scheme, not a plan

By C.B. Forgotston -   Dec 27, 2012

Gov. Bobby Jindal believes that Louisiana needs to privatize the antiquated Charity Hospital System. To that extent we agree.

However, Jindal lacks a plan to do so. He has recently put forth what amounts to another financing scheme to keep the hospitals afloat until he leaves office.

Since the passage in 1965 of Medicare and Medicaid, the days of the Charity System have been numbered.

In the 70s, the LA House Appropriations Committee often discussed the need to phase-out the Charity hospitals and building a new LSU teaching hospital in New Orleans.

At that time the reasons for not phasing out the Charity hospitals to private providers were purely political.

First, there was the patronage that was largely controlled by veteran leges in the areas where the hospitals existed. The second reason was that the private hospitals didnít want poor people mixing with their paying patients.

The first reason continues to exist. The second is no longer valid assuming the state Medicaid reimbursement rates are adequate.

Now, with the passage of Obamacare, there appears to be no plausible healthcare argument in favor of the Charity System.

Jindal has decided to privatize the management of the soon-to-be-built LSU teaching hospital in New Orleans. It appears (information not available to the public) that he wants to sell the LSU hospital in Shreveport. Therefore, an argument in favor of LSU operating even the teaching hospitals is less valid.

Some seem to have the idea that Jindalís public-private partnership between the Charity hospitals and private providers is a plan. Itís not; itís just another financing scheme.

The scheme in its simplest form operates like this:

–The private provider advances the state one dollar called a "up-front lease payment."

–The state takes that dollar to the "Federal Medicaid Bank" and gets 3 dollars in return.

– The state then returns to the private provider its initial "investment" of one dollar plus a "profit" of one dollar in the form of increased Medicaid reimbursements (for its existing hospital(s)).

– The state keeps a $1 to use to fund other Medicaid programs.

Sound good so far?

The problem with this scheme is that Feds usually catch on in a few years and shut it down as it has in the past with other such Louisiana financing schemes. (Remember the Disproportionate Share Program?)

Once caught by the Feds, the Louisiana taxpayers face the problems of how to pay back the money to the Feds and fund the Charity hospitals in the future.

That is why Jindalís is a scheme and not a plan.

The private providers will have provisions in the yet-to-be-made-public lease agreements to terminate their management of the Charity hospitals when the financing scheme ceases.

At that point, those state employees who managed and manned the Charity hospitals will be long-gone just like Jindal. The taxpayers will be left with citizens needing care and no personnel for the hospitals.

The leges must step up and stop allowing themselves to be treated like mushrooms (kept in the dark and covered with manure) by Team Jindal.

The leges must demand a real plan for a permanent phase-out of the Charity hospitals and not merely a scheme to "kick the can down the road."

Iím told that some of the leges already understand Jindalís scheme. Just in case any of them attempt to deny their complicity in the scheme by failing to speak up, show the above to your leges.

Many reading the above will find fault with what I have written. Rather than merely shooting the messenger, come up with a real plan. As long as it is not merely another financing scheme I welcome your thoughts.

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