Safety-net hospitals, med school leaders sound budget alarm
By MELINDA DESLATTE
Apr. 09, 2018
BATON ROUGE, La. (AP) — Louisiana's health officials have ramped up their warnings to lawmakers about budget cuts, saying proposed reductions could devastate services at safety-net hospitals, cripple medical education programs and create damaging ripple effects for years.
Lawmakers are debating how to close an estimated $700 million gap in the budget year that begins July 1. Health care services are the biggest target for cuts, because those programs account for nearly half of Louisiana's annual operating budget.
Over two days of House and Senate budget hearings, managers of the charity hospital system that cares for the poor cautioned of clinic shutdowns and widespread service eliminations if plans to dramatically scale back their financing take hold. Medical school leaders said shuttering of clinics, inpatient beds and services would give them fewer places to train students and fewer dollars to run their programs.
"We're very, very concerned. Unless a viable budget is approved ... what I can tell you is that it's going to be catastrophic," G.E. Ghali, chancellor of LSU Health Sciences Shreveport, told the Senate Finance Committee on Sunday.
Larry Hollier, chancellor of the LSU Health Sciences Center New Orleans, told the House Appropriations Committee on Monday that the medical school's accreditation could be in jeopardy with the cuts proposed. He said of the school's accrediting body: "They're watching very carefully about what happens with our funding."
Louisiana's budget shortfall is caused by the expiration of temporary taxes. A special session called by Gov. John Bel Edwards earlier this year failed to raise any money to close the gap. Edwards wants another special session to consider replacement taxes, but some lawmakers — particularly House Republican leaders — are trying to find ways to slash spending to balance the budget without passing as many taxes as the Democratic governor is seeking.
Cuts to health care spending trigger the loss of federal matching dollars and other revenue sources tied to state spending levels, so slashing the health department can balloon to billions of dollars in reductions.
The New Orleans and Lafayette safety-net hospital managers have formally notified the governor they will return the state-owned facilities and exit their contracts if the worst-case-scenario cuts are enacted. Layoff notices to hospital staff are slated to start going out at the end of the month in Lafayette. Other facility managers have warned of people unable to access services.
If the facilities revert back to state control, that worsens Louisiana's budget hole, because hospital managers would no longer pay an estimated $168 million next year to lease the facilities.
Members of the Senate and House budget committees differed in their reaction to the dire scenarios presented.
"This really comes down to a matter of life and death," said Sen. Regina Barrow, a Baton Rouge Democrat.
Lake Charles Sen. Ronnie Johns, a Republican, told hospital operators: "Hopefully, we'll fix this."
Appropriations Chairman Cameron Henry, a Metairie Republican, suggested the deals struck by former Gov. Bobby Jindal's administration were "a fiasco," too lucrative for private companies. He questioned claims that facility managers would walk away from the deals.
"If you're making money, I can't expect that you're going to leave," he said.
"If you're not going to pay them, I think we can all assume that they're not going to make any money," replied Commissioner of Administration Jay Dardenne, the governor's chief budget adviser.
Rep. Dustin Miller, an Opelousas Democrat, predicted the hospital deals wouldn't be sustainable even if they are patched together for another year.
"The public/private partnerships are going to implode," Miller said. "I'm telling you this will not last."
Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte