The board overseeing development of a new public hospital in New Orleans has approved a business plan calling for a 424-bed, $1.1 billion facility—a plan praised as a boost to the economy while facing opposition from New Orleans residents who want to see the rehabilitation of the old Charity Hospital, closed since Hurricane Katrina.
$1.1 billion New Orleans hospital gets board approval
The plan, presented Thursday to the University Medical Center governing board, still needs approval from a legislative committee that meets next week. It was praised earlier this week by Gov. Bobby Jindal and Mayor Mitch Landrieu.
Developed by Verite Healthcare Consulting, the business plan lowers the $1.2 billion cost of an earlier proposal. But it is still higher in price and much different in scope than one proposed by its chief critics, U.S. Sen. David Vitter, state House Speaker Jim Tucker and Treasurer John Kennedy.
In a joint statement after the vote, the three opponents said they were glad the new plan comes in at a lower cost, eliminating $400 million in state borrowing. "We just wish they were using this opportunity to truly develop a new, better health care model rather than placing the old Charity model in a new, expensive building," the statement said.
Earlier this year, the three pitched an $800 million plan that would include the state buying Tulane's hospitals in New Orleans and Jefferson Parish, which are co-owned by private firm Hospital Corporation of America. Their plan called for those hospitals to be merged with a state-built 250-bed hospital — new construction or, possibly, construction within the shell of the 1930s-era Charity building."This option was dismissed when HCA indicated that Tulane Hospital is not for sale," the Verite report said.
Verite's report says its 424-bed hospital proposal would require state annual operating subsidies that fall between $44 million and $60 million, near current spending levels, addressing a point of complaint from state officials who worry they will have to shell out upward of $100 million in new cash annually to keep the hospital afloat.
About $300 million in state funds and $475 million in federal hurricane recovery funds already are in hand for the replacement facility.
The plan assumes the state would receive another $156 million more in federal hurricane recovery funding. It also would require an LSU foundation or third-party entity to finance $157 million of the cost, for a parking structure and physicians tower.
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