LSU privatization deals OK’d

BATON ROUGE, La. (AP) — The LSU Board of Supervisors approved contracts Tuesday to privatize four more of the university system’s public hospitals, even though the agreements were missing key financing details pertaining to the lease arrangements.

The contracts cover privatization of LSU’s hospitals in Houma, Lake Charles, Monroe and Shreveport.

Agreements submitted to the board contained blank pages instead of specific lease terms or left empty spaces where lease amounts were supposed to be outlined.

Rep. Katrina Jackson, D-Monroe, and other lawmakers asked the board to delay approval of the Shreveport and Monroe deals until all the documents were available.

“What is the rush?” asked Rep. Barbara Norton, D-Shreveport. “I ask you all, I plead with you all, not to sign this contract today.”

Board Chairman Hank Danos didn’t address the concerns during the meeting. But when questioned by reporters, he said he had full confidence in LSU System President William Jenkins and officials from Gov. Bobby Jindal’s administration, who he said have been vetting the pending deals with lawyers and technical experts.

The board on Tuesday agreed to give Jenkins the authority to sign off on final lease and rental payment deals.

“We care tremendously about specifics, but we also trust Dr. Jenkins,” Danos said.

Jindal wants to privatize all but one of the 10 LSU hospitals that care for the poor and uninsured and provide training to students of medicine and health care. With Tuesday’s approval from the LSU board, seven privatization contracts have been signed.

LSU hospital leaders said the privatization arrangements will preserve care for the uninsured, offer them new services and enhance graduate medical training programs around the state.

“We think it is the best solution going forward,” said Robert Barish, chancellor of the LSU Health Sciences Center-Shreveport.

Operations of the Shreveport hospital and E.A. Conway Medical Center in Monroe and their clinics will be turned over to the nonprofit Biomedical Research Foundation of Northwest Louisiana. The foundation’s president, John George, sits on the LSU board and wasn’t present Tuesday for the privatization vote.

The privatization will take effect on Oct. 1 under the 40-year deal.

In Houma, Ochsner Clinic Foundation and Terrebonne General Medical Center will manage the LSU hospital, the L.J. Chabert Medical Center and its outpatient clinics, under a five-year agreement with automatic renewals. Management shifts on June 24.

In Lake Charles, W.O. Moss Regional Medical Center’s inpatient beds and emergency room will be closed and those services will be picked up by Lake Charles Memorial Hospital, which will build a new outpatient clinic as part of a 30-year contract. Legislation authorizing closure of the inpatient services still needs final passage. Management turns over June 24.

The Jindal administration wants to have all hospitals, with the exception of the LSU facility in Tangipahoa Parish, under private management by Jan. 1. Prior deals covering Baton Rouge, Lafayette and New Orleans hospitals had been signed before Tuesday’s board meeting.

Baton Rouge’s hospital was closed, and most of its services were shifted to a private hospital in the city. In New Orleans and Lafayette, private hospital operators will take over LSU hospital management on June 24.

Jindal has described the deals as a cost-savings for the state and an improvement of an outdated charity hospital model.

The Republican governor’s chief budget adviser, Commissioner of Administration Kristy Nichols, said last week that the total operating budget for all LSU-affiliated hospitals and clinics will be $1 billion next year, an increase from the $955 million budget the facilities had at the start of the 2012-13 fiscal year.

But Nichols said the state will net $100 million in savings in 2013-14 because of lease payments the private hospital operators will make annually to take over the facilities.

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