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Privatization under way for LSU hospital


By Associated Press
Posted: January 18, 2013 - 7:30 pm ET
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A private operator has agreed to run the LSU hospital in Lake Charles, La., that cares for the uninsured, Louisiana Gov. Bobby Jindal's administration announced Friday. The agreement is part of the administration's efforts to move away from a university-run public hospital system.

The Department of Health and Hospitals said management of LSU's W.O. Moss Regional Medical Center will be turned over to Lake Charles Memorial Hospital and West Calcasieu Cameron Hospital.

The arrangement, according to DHH, is similar to privatization plans for the operations of LSU's hospitals in New Orleans, Houma, Lafayette and Baton Rouge. The Jindal administration also is seeking private managers for the university system's other hospitals.

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"This is the fifth proposed agreement for south Louisiana, strengthening safety net medical care, enhancing opportunities for medical students and creating a more sustainable health care system," LSU hospitals chief Frank Opelka said in a statement released by DHH. "Each partnership is locally driven, making better use of existing resources and keeping care available in these communities."

The details of the arrangement for W.O. Moss weren't released Friday. DHH and LSU officials didn't provide a copy of the agreement that has been signed with the private hospitals.

DHH said Lake Charles Memorial Hospital will make lease payments to the state. The money will be used to draw down federal dollars to pay for services. West Cameron Calcasieu Hospital will then sublease part of the property from Lake Charles Memorial Hospital.

The health department said the privatization plans will shrink state costs, while maintaining health services and graduate medical education programs. The private hospitals will be responsible for facility maintenance and operation, according to DHH.

The privatization arrangement needs approval from the LSU Board of Supervisors.

The board approved outsourcing plans for the New Orleans, Houma and Lafayette hospitals in December. A separate, similar plan for Baton Rouge was worked out a few years ago and takes effect within the next year.

LSU board members have said they hope to move the university system out of the hospital business and return the focus to education.

The lease agreements are designed to help fill budget gaps at the hospitals. Jindal stripped more than $300 million in state and federal funding for the LSU health system after Louisiana's Medicaid financing was reduced by Congress.

Thousands of workers at the LSU health facilities will face layoffs under the plans and will have to reapply for their jobs with the private hospital operators.

The cooperative endeavor agreements for each privatization plan, when they are completed between the state and the hospitals, will go to lawmakers on the joint House and Senate budget committee for review. Opelka has said he hoped to have the transactions complete before the budget year ends June 30.


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