Picayune: "Jindal says LSU needs more detailed plan on hospital"

BATON ROUGE -- Louisiana State University System officials must craft a more detailed business plan for the proposed state medical complex slated to be built in New Orleans as a replacement of the old Charity Hospital, Gov. Bobby Jindal said today.

"They will tell you they have a business plan," Jindal said of the university system that runs the state's public hospital system. "My point is that they need more details."

The governor said he remains a supporter of the proposal for a 424-bed academic medical complex in lower Mid-City. His comments come in the context of a legislative session that includes debates over the hospital's governance and a bill that could slow the state's acquisition of land for the facility.

A House committee last week endorsed House Bill 780 by Rep. Rick Nowlin, R-Natchitoches, that would block the state from purchasing or taking property until the Legislature's Joint Budget Committee approves a "financing plan."

"I do think we need to move forward," Jindal said. But he added that Nowlin raises a legitimate concern about cobbling together the footprint with many lingering questions surrounding the project.

The Legislature's joint budget panel already has approved two plans for the hospital, including the latest version released in mid-2008 with Jindal's backing. That proposal calls for a $1.2 billion facility with $492 million coming from federal reimbursement for Hurricane Katrina damage to Charity; $300 million coming from the state's capital outlay budget; and the rest coming from bonds to be repaid with the hospital's future operating revenues.

Only the state's contribution is confirmed. The state facilities office remains in a long-running dispute over the Federal Emergency Management Agency's $150 million offer for Charity damage. The planned independent governing board that would sell the bonds has not yet been created, and that body could not go to the private bond market until the FEMA piece of the construction budget is in place.

The planned operating model also assumes that about a third of the patients, many of them projected to come from LSU physicians, would have insurance coverage. That's a considerably higher portion of paying patients than have ever used Charity or University Hospital.

Besides Jindal's remarks today, some LSU critics -- including state Treasurer John Kennedy -- have complained that the business plan is not detailed enough, particularly given the possibility that Congress and President Barack Obama could overhaul how federal health-care money is distributed.

"It would be to LSU's benefit" to expand its plan, Jindal said, arguing that it will eventually be required anyway to attract bond investors.

Dr. Fred Cerise, LSU's vice president for health affairs, said last week that Congress is most likely to expand health coverage. Cerise said LSU's underlying assumption is that the paying patient base in the region will increase.

Separately, lawmakers are mulling how to structure a governing board of a new hospital. House Bill 830 from Speaker Jim Tucker, R-Algiers, began as a proposal to strip LSU of much of its control of New Orleans' public hospitals, with a board that includes no representatives from any of the universities that have a stake in the hospital's training programs. But the bill has been amended and remains the subject of wrangling.

There also are negotiations -- including the state, LSU and Tulane University, among others -- to craft a new governing agreement that could make the Tucker bill moot.

Jindal repeated today that he believes all the participating schools should have representation and that the governing board should have authority to sell bonds independent of the state. The governor, positioning himself as dispassionate arbitrator, said he is willing to accept that model either through Tucker's bill or a new agreement among the schools.

Bill Barrow can be reached at bbarrow@timespicayune.com or by calling 225.342.5590.

Original Article: "Jindal: LSU needs more detailed plan on hospital"
by Bill Barrow | The Times-Picayune
June 1st, 2009