Plan Could Mean the End for La. Charity Hospitals
The Town Talk
Alexandria, La.
September 9, 2009
By Mike Hasten

BATON ROUGE -- If the federal government approves a plan that gives most people medical insurance, much of Louisiana's charity hospital system could become unnecessary, a state health official says.

Charles Castille, undersecretary of the Department of Health and Hospitals, said Tuesday the federal government's proposal to expand the Medicaid program to cover anyone earning up to 130 percent of the poverty level would cover 1.9 million people in Louisiana -- about 45 percent of the population. The cards would guarantee payment at any hospital in the state.

He said DHH is working toward turning over as much health care as it can to the private sector because the price of operating a state-run system keeps escalating. For example, it costs the state $175,000 a year to care for a patient in a state-run developmental center when a private facility costs $85,000.
"We're looking at DHH getting out of the business of providing care and just making sure it's provided," he said.

"Would folks keep going to charity hospitals?" Castille asked a Government Streamlining Commission subcommittee on duplication before pointing out research shows that when given a choice, they go private hospitals.

Castille said he is echoing predictions made by his boss, DHH Secretary Alan Levine.
Levine has said that DHH has asked the federal government to approve putting more Louisiana residents on Medicaid. Issuing them what is, in effect, insurance cards would be cheaper for the state and reduce demand on state hospitals.

"It would end the Charity Hospital System as we know it," if the federal plan is approved, said State Sen. Jack Donahue, R-Mandeville. "It would essentially put the Charity Hospital System out of business because people could go anywhere."
"Unless they are centers of excellence, I think they would be in trouble," Castille said.
Donahue said that knowing that, he doesn't understand why DHH keeps pushing to build a new Charity Hospital in New Orleans.

"I can't see how they justify spending $1.2 billion in a city whose population is down," he said. "It reflects a lack of priorities in the state affecting everything. It's not really a plan."

Donahue said DHH is using a needs study developed in 2004 before Hurricane Katrina devastated the city and drove away half of its population.

"From a business standpoint -- and I consider myself a businessman -- it doesn't make sense to me," he said.

Barry Erwin, president of the Council for A Better Louisiana and chair of the panel on duplication, said the members' questions reflect DHH should do "a new study to justify the needs" in New Orleans.
The continuing decline in state revenues, which led to the creation of the streamlining commission, is forcing the state to take a close look at all facilities, Erwin said.

"Maybe the facilities a lot of people thought were anachronistic have become more so," he said. "The Legislature has never been able to pull the trigger" and eliminate some facilities, Erwin said. "This budgetary environment may be what gets us over the hump."

Louisiana is one of the few states with a charity hospital system and has 10 hospitals across the state.

Panel member Tony Gordon III of Lafayette cited a Pricewaterhouse Coopers study that said Louisiana needed fewer state hospitals and that patients could receive care more economically at private hospitals.
"It was a very good study and the commission should examine it and give it some consideration," said Gordon, vice president of the Franciscan Missionaries of Our Lady Health System.
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