Lafayette General threatens to close Louisiana hospital, terminate 800 employees without full state funding

Lafayette (La.) General Health issued a letter April 3 to Louisiana Democratic Gov. John Bel Edwards and the Baton Rouge-based Louisiana State University's board of supervisors threatening to close Lafayette-based University Hospital & Clinics and fire its 800 employees June 30 due to a lack of state funds.

LGH entered into a public-private partnership with the state in 2013 to run UHC. However, LGH President David L. Callecod wrote in the letter, "The continued reduction in funding for UHC makes its operation untenable and creates systemic risk for our not-for-profit, community-owned health system."

The letter calls on the state to fully fund the 116-bed hospital by June 30. If LGH does not receive funding, the seven-hospital system will terminate its cooperative endeavor agreement to run UHC June 30, leaving LSU to take over the hospital's operations. If LSU chooses not to do so, LGH will close the hospital and fire its 800 employees.

However, if LGH receives full state funding by the end of the anticipated special session, LGH will rescind its notice of termination and continue all services at UHC.

"Such a decision is not taken lightly given Lafayette General Health's commitment to care for its community, including the indigent and uninsured population. … It is unfortunate that the budget impasse the state finds itself in could lead to devastating, unrecoverable instability for thousands of employees, physicians, learners and patients who rely on the critical healthcare services UHC provides," Mr. Callecod wrote in the letter.

Mr. Callecod noted UHC and LGH will continue to provide care to patients until the state's deadline.

The letter comes amid turmoil regarding the state's budget crisis. Mr. Edwards presented an executive budget in January that included a $656 million reduction in state funding to the Louisiana Department of Health, which would result in the loss of an estimated $1.6 billion in federal matching funds, according to the daily advertiser.

To access the letter, click here.

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