One component of the Jindal administration’s 2016 budget proposal, revealed Friday, involves holding the line on spending in the public-private hospital partnerships. The private partners in the LSU hospital deals had asked for an additional $142-million in the fiscal year that starts July 1.
“What we funded these hospitals for was level funding, effectively,” Commissioner of Administration Kristy Nichols detailed to the Joint Budget Committee. “And some of the hospitals are projecting growth above level funding. That’s the point of discussion that we are going to have to work through in this process.”
Nichols said the state isn’t going to stop paying the private partners, but the administration isn’t going to let their costs keep growing, either.
“The state is certainly obligated to cover the cost of care. But they are obligated, in partnership with DHH, to manage the cost of care and to manage growth,” Nichols said, in defense of the governor’s spending plan.
New Orleans Senator Edwin Murray had questions about what “managing growth” might look like from a patient’s point of view.
“If you deny treatment and don’t provide it, it’s easy to manage growth,” Murray challenged.
“Not necessarily,” was Nichols’ response.
“Well, it’s pretty easy if you deny treatment,” the senator continued. “If someone shows up for treatment and they say, ’Well, we can’t see you today,’ or schedule your clinic visit for eight or nine months down the road, you’ve managed growth because you didn’t provide the service.”
Murray also had concerns about potential consequences of not granting the increases the partner hospitals had requested. Of the total $142-million hike requested, nearly $88-million was for the New Orleans LSU partner, due to open the new $1-billion University Medical Center later this year. Murray quizzed Nichols about specific provisions in the partnership agreements.
“Under what we’re doing in the proposed budget, it would allow these private partners—if they chose—to walk away from these deals?” Murray asked.
“There is that provision in their contracts, yes,” Nichols reluctantly admitted.
“So does that come into play now? If the money is not there to perform their mission, can they walk away from these arrangements?” Murray asked, for clarification.
“The short answer is yes they can,” Nichols said. “But I don’t think there’s any intent of any of the partners to do so.”
Our Lady of the Lake, LSU’s partner in Baton Rouge, had asked for $7.4-million more in the next budget. We contacted OLOL, requesting comments, but have yet to receive a response.