June 10, 2011

ICYMI: Forget UMC plan, 3 urge Jindal (New Orleans Times-Picayune)

In Case You Missed It: Forget UMC plan, 3 urge Jindal (New Orleans Times-Picayune)


Excerpt: “Vitter and Kennedy have long been critics of the project, asserting that it will be an oversized drain on taxpayers. Tucker, however, previously has been among the New Orleans lawmakers defending LSU’s preferred model as a reasonable investment in medical education, research and patient care. The speaker said Thursday that political and fiscal realities in Baton Rouge have changed during the course of the hospital planning…

“…The arrangement, the men say, could be achieved with the money the state already has committed to UMC and possibly minimize or avoid state support by absorbing Tulane’s commer-cially insured patients.”


Times-Picayune
Forget UMC plan, 3 urge Jindal
GOP bigwigs float buying Tulane sites
By Bill Barrow
June 10, 2011

In the latest volley over plans for a medical center to succeed Charity Hospital, House Speaker Jim Tucker joined two statewide elected Republicans on Thursday to urge Gov. Bobby Jindal to abandon the current University Medical Center project in favor of the state buying and expanding Tulane University’s privately owned hospital facilities.

Outlined in a letter from Tucker, U.S. Sen. David Vitter and state Treasurer John Kennedy, the idea appears to be a late-game long shot, with the state facilities office itching to start construction and the UMC board developing a business plan with the intent of selling high-yield bonds for construction, perhaps by the end of the year. Yet with the financing puzzle still missing pieces and skeptical legislators holding leverage, the latest proposal — and Tucker’s endorsement — reinforces the political hurdles facing the current $1.2 billion plan for a Mid-City complex near downtown.

Vitter and Kennedy have long been critics of the project, asserting that it will be an oversized drain on taxpayers. Tucker, however, previously has been among the New Orleans lawmakers defending LSU’s preferred model as a reasonable investment in medical education, research and patient care. The speaker said Thursday that political and fiscal realities in Baton Rouge have changed during the course of the hospital planning.

The letter also continues the jousting over estimates about how much state support a new hospital would require, with the authors seizing on projections of a $100 million-plus annual state general fund appropriation. LSU counters that such a sum would be spent on care for the uninsured and underinsured regardless of the new hospital’s configuration.

Rather than borrow money to complete the construction bud¬get, itself still not finalized, the three Republican officials said the state could buy Tulane Medi¬cal Center for $80 million — a figure whose source they do not identify. The transaction would involved both the downtown hospital and Tulane Lakeside in Metairie. UMC could build as many as 250 new beds, they posit, either in the old Charity Shell or on the Mid-City foot¬print slated for UMC, for a total of about 600 beds, more than the current plan, but still a lower overall gain for the regional mar¬ket that already has a higher bed-to-population ratio than the national average.

The arrangement, the men say, could be achieved with the money the state already has committed to UMC and possibly minimize or avoid state support by absorbing Tulane’s commer¬cially insured patients.

Vitter concedes that he has not delved into the details of his assumptions. But the letter urges Jindal to commission Kaufman, Hall & Associates to analyze the feasibility and financial implica-tions of the idea. The Illinois firm just completed a critique of the existing plan for the UMC board. Involved parties all said they had not been consulted about the details of the plan: Bobby Yarborough, chairman of the UMC governing board; Dr. Fred Cerise, LSU’s vice president for health affairs; Tulane Uni¬versity President Scott Cowen, whose school owns 17.5 percent of Tulane Medical Center; and Dr. Bob Lynch, CEO of Tulane Medical Center and employee of Hospital Corporation of Amer¬ica, which owns the remaining 82.5 percent.

Dr. Larry Hollier, chancel¬lor of the LSU Health Sciences Center in New Orleans, told the Senate Finance Committee in Baton Rouge on Thursday that the proposal is “ridiculous.”

Vitter did not dispute that the letter itself blindsided other offi¬cials. But he, Kennedy and Tucker said they have discussed the gen¬eral concept of the state buying HCA out of the hospital market with hospital and university play¬ers in the past several years.

Tucker said the idea “took on urgency” with when Kaufman Hall issued its final report last week.

While Vitter’s and Kennedy’s protests have largely ranged from an irritant to an embar¬rassment for Jindal and LSU, Tucker’s participation could yield tangible effects on the UMC timeline, regardless of the details of their proposal.

The speaker holds consider¬able sway over the Joint Legis¬lative Committee on the Budget, which must approve construction contracts before the state facili¬ties office can proceed with con-struction. State building coordina¬tor Jerry Jones has said he could be ready as early as this summer. But House Budget Chairman Jim Fannin, D-Jonesboro, demand¬ed the hospital’s final business plan — details of its size, scope of services, operating projections and construction financing — before granting that approval. Yarborough has promised to pres¬ent that document by Labor Day.

Lawmakers, who are in ses¬sion until June 23, also are con¬sidering a concurrent resolution that would require legislative approval of the business plan. Concurrent resolutions do not go to the governor’s desk, meaning Jindal could not veto the matter.

Cerise said he would be will¬ing to discuss UMC with Tucker, with the conversation focused on state support for the facili¬ty. Cerise said lawmakers, crit¬ics and news media have incor¬rectly framed the future state support as a “new commitment” tied to construction of UMC. In fact, he said, the state already spends about $90 million annually supporting Interim LSU Pub¬lic Hospital, with much of that money routed through a joint state-federal program to cover treating the uninsured rather than through direct state general fund support.

That program will be phased out as part of the federal health care overhaul. Additional state money that would be spent on expanded Medicaid rolls and support for the uninsured, Cerise said, will likely be spent any¬way, whether it’s at a new UMC, another configuration of a new hospital or the existing network of providers.

Yarborough, an ally of both Jindal and Vitter, said he plans to meet with the senator today.

At Tulane Medical Center, Lynch said, “We are always will¬ing to participate in any discussion with appropriate parties that pro¬vides an opportunity to improve patient care and access to the citi¬zens of Louisiana, but we have not been approached or involved in this particular situation.”

Jindal spokesman Kyle Plot¬kin said of the letter: “We appre¬ciate their ideas and look for¬ward to meeting with them after the legislative session.”

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