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Report: Privatization of LSU Hospitals Lacks Long-Term Vision

Hospitals within Baton Rouge-based Louisiana State University's health system were privatized under a state plan over the past year-plus, but financial hurdles may appear in the not-too-distant future, according to a report from the Public Affairs Research Council of Louisiana, or PAR.

Throughout the course of 2013, Louisiana Gov. Bobby Jindal set the stage to sell and close hospitals within Baton Rouge-based Louisiana State University Health Care Services Division. Gov. Jindal and other Louisiana policymakers said the safety-net LSU health system was losing money, and privatizing the hospitals would save the state $100 million annually.

W.O. Moss Regional Medical Center in Lake Charles and Earl K. Long Medical Center in Baton Rouge both closed their doors this year as part of the process, while many of the other LSU hospitals began their partnerships with new private operators. For example, in June, Louisiana Children's Medical Center in New Orleans took over Interim LSU Public Hospital, also in New Orleans. Lafayette (La.) General Medical Center absorbed University Medical Center, also in Lafayette.

According to PAR's report, the new private hospital operators will pay Louisiana $140 million in lease fees every year. However, the state's decision to reject Medicaid expansion under the Patient Protection and Affordable Care Act and the state's dependency on disproportionate share hospital payments (which will eventually be cut by billions of dollars under the PPACA) raises questions of whether the private partnership plans "will be financially feasible in later years," according to the report.

PAR has advocated for Louisiana to alter its safety-net hospital system, but the group has said a bigger emphasis on preventive care, transparent financial data and clinical outcomes is needed.

In September, the Louisiana Legislative Fiscal Office said the lease payments will be far less than what the Jindal administration had planned, as well.

More Articles on LSU Hospitals:
The Most Influential Hospital Transactions of 2013
2 LSU Hospitals Change Names Under New Management
LSU Hospital Privatization to Produce $39M Less Than Expected

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