BATON ROUGE, La.: Gov. Bobby Jindal’s hospital privatization deals that provide care for uninsured patients are precariously balanced in next year’s budget recommendations, with one-third of their financing reliant on tax changes uncertain to win passage from state lawmakers.
The House Appropriations Committee was told that the governor’s $9.5 billion health care spending plan for the fiscal year that begins July 1 relies on $407 million from Jindal’s proposal to shrink spending on certain tax breaks.
Most of that uncertain money, $332 million, is plugged into payments for Jindal’s contracts that turned over the LSU-run hospitals and clinics to private managers. If those dollars don’t show up, hospital payments would be cut from more than $1.1 billion to $815 million under the governor’s budget.
“If that (money) is not seen, do you foresee a possibility of any of these partnerships coming back to the table, backing out, being revised?” Rep. Patricia Smith, D-Baton Rouge, asked Health and Hospitals Secretary Kathy Kliebert.
Kliebert replied: “Certainly, I would see the possibility of the partners coming back and some requesting to be out of the contract, out of their agreement, or they would have to significantly reduce services.”
Already, the private operators of the state-owned hospitals and clinics say they need $142 million more than Jindal’s budget provides – even with the money from the tax break scale-backs. Nearly $88 million of that request would pay for the hospital in New Orleans, which will shift services from an interim facility to a larger, new hospital this summer.
Kliebert said she thinks she has identified a funding stream to pay for the increased costs of the new hospital in New Orleans. But Appropriations Committee Chairman Jim Fannin told her she should not assume the dollars from Jindal’s proposal to rework the tax credits would arrive.
Business leaders and lawmakers are balking at the biggest tax credit on the chopping block in the governor’s plan. Fannin, R-Jonesboro, said lawmakers need to consider the health care proposal without having the money from the tax changes “because that takes a lot of action to ever get there.”
Smith and other committee members worried about the potential impact on health care services for the poor and uninsured if the LSU privatization deals face steep cuts.
“Since we are already in a very detrimental place when it comes to health outcomes, that would be even more detrimental to us as a state, wouldn’t you agree?” she asked Kliebert.
“I certainly would agree, yes,” Kliebert said.
Jindal has privatized nine LSU-run hospitals and their clinics over the past two years. In most instances, the management company of a nearby hospital took over operations. Three contracts closed an LSU hospital and shifted its services to private hospitals. -AP
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