Wed March 26, 2014
Forced Charity: LSU Hospital System Makeover
It’s been nearly a year since the state started implementing public-private partnerships for the LSU Hospital System, formerly known as Louisiana’s Charity Hospitals. The plan was pushed as a cost-saver for the state. How is it working out? Good for some and not so good for others—with patients and hospital caregivers caught in the middle.
On any given day or night, the emergency room at Baton Rouge General’s Mid-City Hospital is packed with patients. Baton Rouge General’s vice president Dionne Viator says since Earl K. Long Hospital shut down in April 2014, Mid-City’s E-R is hustling hard to keep up.
“We do not turn anybody away in an emergency situation,” Viator assures the public. “But we have longer waits there than we’d like. Although we have added to the staff there, our caregivers are overwhelmed.”
Viator says they expected some increase in patients when EKL closed, and had expanded their emergency room ahead of time to try and prepare. But they didn’t anticipate having a 44-percent increase in patients coming through their doors.
“And now about 49-percent of our total patients in the emergency room at Mid-City have no source of payment,” Viator says, adding, “Our cost of indigent care is now exceeding ten million dollars a year.”
Baton Rouge General Mid-City is the closest hospital to the former Earl K. Long facility, at just under 7 miles away. In cases of life-threatening injury or illness, the closest hospital is where emergency responders are required to take patients. But BR General Mid-City is not the state’s partner in the privatization of charity care. That contract went to Our Lady of the Lake, almost twice as far from EKL at 13.5 miles away.
It appears to be a good deal for Our Lady of the Lake, according to Don Gregory, healthcare advisor for the Public Affairs Research Council. Gregory, a former state Medicaid director and the author of a recent PAR report analyzing the LSU Hospitals privatization plan, says Our Lady of the Lake made out well financially, unlike BR General Mid-City.
“The Lake, through their contract and agreement with the state, basically gets 100% of their uncompensated care costs met by the state,” Gregory explains. “Baton Rouge General-Mid-City does not. They get a per diem payment, which is a daily payment, based on the pool of similar hospitals in size. They basically get a daily amount that they have to live by. The Lake gets their costs met--for the most part.”
Because of the uptick in their volume of patients, Baton Rouge General is now getting a 5-percent increase in state payments for Medicaid patients, which helps some. Yet the influx of uninsured patients, Viator says, means BR General—which is a non-profit organization—is being forced to be a charitable organization instead, as they give away $10-million worth of care in the past year.
“As a not-for-profit, for a hundred years Baton Rouge General has been here and serves this community,” Viator says. “I think that what this has brought to light, though, is that the charitable care—particularly at the Mid-City campus—has gotten to a point where it is not sustainable.”
While BR General Mid-City is seeing the biggest impact from privatization of charity care, they’re not alone. Lane Regional Hospital in Zachary, just under 13 miles from the former Earl K. Long Hospital, is also getting swamped with patients who would have previously gone to EKL.
There are two avenues of hope for Mid-City’s budget crunch, Viator says. One might be changing the Baton Rouge-area model to be more like the privatization contract for central Louisiana’s LSU Hospital. That deal, due for approval during the current legislative session, has two Alexandria-area hospitals serving as LSU’s private partners. The other hope is with expanding Louisiana’s Medicaid program under the Affordable Care Act. Viator says that would mean more of the patients that are currently unisured could get coverage.
“Because there is no direct reimbursement that Baton Rouge General has for charity patients, that increase in Medicaid would be beneficial for us,” Viator says.
It could also be beneficial for other non-partner hospitals around the state, as each could then get some payment for treatment they’re now having to give away free. Although Governor Bobby Jindal is dead-set against expanding Medicaid, a number of state lawmakers have proposed constitutional amendments, which would allow the people of Louisiana to vote on it themselves.
And the question remains: is Louisiana really saving money with the LSU Hospital public-private partnerships? Gregory says it does not appear so.
“The administration, at the end of the session last year, was touting about a hundred million dollars savings in the privatization of the LSU hospitals,” Gregory explains. “Interestingly enough, they’ve proposed about a 99-million dollar increase in uncompensated care funding for the LSU hospitals in THIS year’s budget.”
Some of that is federal money, but a portion is state funding.
“We are proposing an increase in funding for the charity hospitals public-private partnerships of $25.3 million dollars,” Louisiana Commissioner of Administration Kristy Nichols has been telling finance committees in the Legislature. Of that amount, $11.2 million is to going to the EKL partnership, i.e., Our Lady of the Lake.
Gregory tells us Louisiana’s tab for charity care will keep going up without the Medicaid expansion. That’s because federal funding for uncompensated care starts to drop next year, and will decline nationally by $18-billion by 2020.