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Stiffed again on medical re-design in Louisiana

Dan Juneau -   July 19, 2007

Close to the end of the recently completed legislative session, the Legislature—obviously with the support of the governor—stiffed the taxpayers of Louisiana for $300 million. Perhaps it was hard to notice this obscene gesture cast in our direction because of the stampede of spending going on at the same time. However, it deserves to be noticed by everyone who pays taxes in any form or fashion to the state treasury.

The central issue at play is the question of how large of a Charity Hospital should be built in New Orleans to replace the old facility; how its mission—and the mission of the entire system—should interface with health care redesign in Louisiana; and whether or not dollars for indigent health care should follow patients or should flow directly and almost exclusively into Louisiana’s one-of-a-kind system.

The proposed price tag for the New Orleans’ facility is a whopping $1.2 billion. Some $300 million of the funding was slated to come from federal Community Development Block Grants funneled through the Louisiana Recovery Authority. For months now, both the federal Department of Health and Human Services and Housing and Urban Development have made it clear that they were not enamored with plugging hundreds of millions of extra federal dollars into what they considered an archaic “two-tiered” (Medicaid and uninsured versus privately insured) system of health care delivery in Louisiana. Some of our state elected officials have been equally as clear that they are not at all interested in changing in any significant fashion the way indigent health care is delivered in the Bayou State.

There is a significant amount of support building in Louisiana for a redesigned health care system which would allow public dollars to follow indigent patients, begin to dismantle the “two-tiered” system, and encourage more public-private partnerships in health care. The warlords in government who are protectors of the status quo are fighting an all-out effort to stop true reform from happening. The $300 million bill they recently stuck the taxpayers with is part of that effort.

After the Secretary of Housing and Urban Development—who must sign off on the $300 million—sent a letter stating concerns about how the new hospital would interface with health care redesign efforts, the record-breaking appropriations bills were amended in the Legislature to transfer $75 million in direct appropriations to the hospital project and to pay for the remaining $225 million by selling bonds. One of the architects of this maneuver offered the interesting comment that the taxpayers would be “better off” handling the situation in this fashion.

Louisiana’s taxpayers can expect more “surprises” in the future from this project. The “business plan” for the hospital assumes that the new facility will treat 80 percent of the indigent population in Southeast Louisiana and, at the same time, attract a sizeable number of private sector patients. There are many knowledgeable skeptics who strongly question that premise. The plan also envisions the new hospital being in the black during the first year of operation. If it is wrong, guess who is going to have to cough up more money to pay off the bonds? Yes, that would be you!

There is a big push to move this project as currently constituted beyond the point of change before a new governor and new Legislature are sworn into office. Perhaps the champions of the status quo—the folks who stuck you with an unnecessary $300 million bill—don’t want the new group coming in to apply the smell test to this very questionable project.

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