BREAKING NEWS---- UMC Plans Face Serious Opposition as Vitter, Kennedy, and Tucker Pitch Alternative

Senator David Vitter, House Speaker Jim Tucker, Treasurer John Kennedy and state leaders sent a letter today - Thursday - June 9, 2011 -  to Governor Bobby Jindal envisioning an $800 million alternative for the new UMC Academic Medical Center that includes the potential of reconstituting a healthcare facility in the existing Charity Hospital shell.  [Read attached letter for details]

The much more fiscally responsible plan could entail using Charity Hospital as one of the entities that would make up the new University Medical Center.  Senator Vitter has been very vocal as of late in regards to his concerns that the 424 bed hospital proposed by LSU and the State is unsustainable over the long term.  Treasurer Kennedy, too, has long been a critic of the project, especially it's lack of a business plan.

Vitter's and Kennedy's concerns are supported by a report that was presented to the UMC Board at their last meting that was written by Kaufman-Hall - an independent and well-respected financial consulting firm out of Illinois who specialize in health care and who were hired by the UMC board to do the number crunching for the UMC's long awaited - and much needed - business plan. 

Kaufman-Hall - taking into consideration new factors and variables presented by LSU when they asked Kaufman-Hall to revise their report after they found the first draft that was leaked back in April - (not to their taste) -  estimated that the new Academic Medical Center, at best, could only support between 330-403 beds.  SaveCharityHospital.com reported on that presentation on June 4, 2011.

 In the new proposal presented today by Senator Vitter and other Republican lawmakers, in addition to the possibility of reusing the existing Charity Hospital building for a smaller hospital, is to make use of a Jefferson Parish hospital as well as buying a share of Tulane University's New Orleans Hospital.  The three combined would comprise the University Medical Center.

At a price of only $800 million dollars, the University Medical Center Management Corporation [UMCMC] would not only be able to afford the new hospital with the funds in hand, but it would also be able to employ the best construction materials, equipment, contractors and marketing firms that are necessary to attract the best doctors and medical staff in the world.

UMC - City Council Caves, Financial Uncertainty Rages On

Two big things happened in the past week.

First, the City Council voted to revoke the public rights of way in the UMC Footprint.

Second, as if that move in and of itself wasn't reckless enough at this point, the Kaufman-Hall report on the feasibilty of the UMC was presented to the UMC Board.  AFTER the City Council voted to revoke.

Credit must be given to Kaufman-Hall for its presentation.  We did not see the "doctored" (pun intended) version of the financial feasibility report that we anticipated.  Instead, the numbers appeared to be rather independent and objective.

Why?  The report revealed what has been said for some time now: the 424-bed design is excessive when looking at patient projections for the coming years.  The UMC Hospital should be smaller - needing somewhere between 330-403 beds.  Gee, isn't it great that we've arrived at that revelation now that the 37-acre site, which was excessive for even the terrible 424-bed suburban design, has been largely destroyed through expropriation and demolition?  Isn't it great that we now see that there's additional uncertainty about what will actually be built (if anything) AFTER the city council has already cowed itself before the juvenile rage of an angry, red-faced, table-pounding Jerry Jones...and whimpered in submission as it gave up its last bit of leverage over this project.  They aided and abetted the fait accompli - so did the Mayor's office, which was pushing very hard to make this happen.

Several other interesting things emerged.  The Kaufman-Hall presentation revealed that the annual state subsidy for the UMC will likely be around $100 million - up from a present figure at about $20 million.  That shouldn't be a problem at all.  You know, the State of Louisiana is just flush with cash right now.  It certainly wouldn't contemplate cutting $800 million in healthcare spending around the state at other facilities.  I'm sure Representative Fannin will just waltz along with this and pony up the dough, a smile on his face.  Importantly, policy changes could skew the estimate.  Under one scenario presented by Kaufman-Hall, if certain reimbursement policies change in a certain way, the annual required state subsidy for operations could be as much as - gasp - $147 million (see page 42).  There's also the $300 million ramp up funding that the state needs to find somewhere in its gold-plated pockets.  And the prospect of legacy debts...something not accounted for in the Kaufman-Hall report.

Several boosters of the UMC spoke before the UMC Board meeting, prior to the Kaufman-Hall presentation, exclaiming "This is our Super Dome moment!"  Wow.  They better have some crow on hand in upcoming months because this thing ain't over, the uncertainty keeps rising...and they might need to eat it.

Oh yeah - there's also this.  The state and UMC are now saying that they will look at financing the $400 million + gap in funding for the complex on the private market...despite all sorts of smokescreen assertions otherwise along the way.

Senator David Vitter, when are we going to see a press release?

Get Ready: A “Revised” Kaufman-Hall Report is likely coming soon

On Thursday, the UMC Board meets at 1 p.m. deep in the bowels of the LSU Medical School complex.

Here’s what our crystal ball shows: the UMC Board’s consultant, Kaufman-Hall, will unveil a “revised” report on the financial feasibility of the proposed UMC complex.  And unlike the earlier leaked draft of the Kaufman-Hall report, which said the current $1.2 billion, 424-bed model would be unsustainable…you can pretty much be certain that this new version of the report will tout the wonders of the UMC.  In this version of the report, now that the UMC Board has conveniently gone for two months without a meeting, you’ll see the numbers somehow supporting the feasibility of the proposed Megahospital.  You can almost smell the sleight of hand.

Will this report somehow constitute the business plan for the UMC?  We’re not sure.  But we are certain that there is still no UMC business plan at this point.

Go to the meeting on Thursday: LSU Health Sciences Center Lions Clinic Building, Isadore Cohn Learning Center, 6th floor. And tell the UMC to stop blowing smoke.

And if you’re not at the UMC Board meeting, you can always head on over to the City Council meeting where it’s highly likely that the City Council will be considering the revocation of the streets in the UMC Footprint despite the fact that council member Head iterated at the Public Works "information only" hearing on May 23rd, that the item would probably not come up before the next full Council Meeting or the one after that.  [Audio blurb begins at 1:30:28]. While the meeting starts at 10 a.m., council meetings tend to drag on for hours.  Check the City Council website calendar on Wednesday.

Tell your city council members: do not revoke the UMC streets!  The City should not give up its last bit of leverage over the UMC Footprint.  We’ve already seen the VA Hospital destroy the street grid – killing off key thoroughfares like Banks Street.  Adding another “superblock” to the mix with the UMC would dramatically distort city traffic patterns.

Plus, as the blog Inside the Footprint noted a few weeks ago, it’s not clear that the State will even follow the terms of the renegotiated CEA that the city fought for to improve design.  Specifically, Jerry Jones told a state legislative committee that the state might not even build the second parking garage mandated in the CEA: “We don't think the other parking garage is absolutely necessary."

We haven’t seen any houses moving off the UMC site.  Nobody seems to know what’s going to happen with McDonogh No. 11 School.  And the Blood Center is still being forced from the site.  And there are hundreds of legal suits in progress as we speak.

There’s so much uncertainty clouding the UMC project that the streets should not be revoked!

A Bucket of Bravado

That's what Jerry Jones with the Office of Facilities and Planning Control was offering up last night at a Special Committee on Hurricane Recovery meeting in New Orleans City Council chambers.  It seems that acting "fired up" is now enough to justify moving forward on a hospital that doesn't have a business plan and doesn't have adequate financing lined up.
 

It was unbelievable to see the difference between the way legislators treated the UMC presenters - including the mysterious "Dryades Street Public Policy Group" - and the way the legislators treated the Office of Community Development.  Skepticism applied to the second group; Senators emphasized "truth and reality" in leveling criticism.  But not to the first group, for some reason.

 

Council Member Kristin Palmer was present, thankfully, and added a healthy dose of questioning.  Senator Karen Carter Peterson was skeptical and aggressive - but for the wrong reasons.  She wanted the state to stop doing studies and go, no doubt because her legislative baby, BioDistrict New Orleans, hangs in the balance.  Hours earlier, Mid-City residents and representatives of the Mid-City Neighborhood Organization showed up at a special meeting of the BioDistrict board...and went to town, calling to have their neighborhood REMOVED from the 1,500 acre district.  
 

But Jones, as he misrcharacterized various things in the hospitals timeline and noted the "green dots" on the site, noted two key chokepoints coming up - points where the growing uncertainty about the project might catch up with it.  The first is the City Council revocation of the streets.  Jones noted that if the council "balks," it will be a signal that New Orleans doesn't want the hospital.  The Times-Picayune lapped it all up - reporting Jones' call for unity in backing the hospital.  That's a major oversimplification - proceeding carefuly on street revocation would likely be a sign that New Orleans doesn't want Baton Rouge coming down and forcing a horrific boondoggle down its throat.  The state continues to blame advocates for delays when it's the state's own lack of a business plan that's really driving the continued legislative indigestion.


The second chokepoint is the need to get the legislature to approve Jones moving forward with the construction manager at risk for the project...from the site prep. phase to the actual construction phase.  Based on the state of the legislature these days, that might prove difficult.  Bravado enough will not be sufficient to clear these hurdles.



Things to ponder, things to watch.