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Cuts still looming for LSU-run hospital system

MELINDA DESLATTE
Associated Press

BATON ROUGE, La. (AP) - If LSU leaders can't find new, permanent financing sources or ways to cut annual spending for the university's public hospital system, internal memos offer a glimpse of the implications from the system's shrinking budget: severe damage to health care services and medical training programs.

University officials are weighing long-term ideas for coping with dwindling state funds, after Gov. Bobby Jindal's administration decided to levy much of an ongoing federal Medicaid cut on the LSU-run network of hospitals and outpatient clinics.

LSU is using stopgap funding to stave off many of the immediate cuts to the 10-hospital health system that cares for the poor and uninsured and trains many of Louisiana's medical professionals. But the Jindal administration has said continued drops in financing should be expected annually.

Before they cobbled together the temporary fix, LSU health care leaders grappled with how to strip more than $300 million in annual funding - a quarter of the hospital system's financing - from its budget for the fiscal year that began July 1.

The scenarios, outlined in documents released by LSU in response to a public records request, described likely hospital closures, thousands of layoffs, jeopardized patient care and medical training programs pushed to the brink of elimination.

One approach tried across-the-board cuts at many of the hospitals. That "caused bed closures, elimination of graduate medical education programs, elimination of training for nursing and allied health professional students and a severe reduction in the ability to care for patients," Roxane Townsend, head of the LSU Health Care Services Division, wrote in a memo to LSU's vice president for health affairs, Fred Cerise.

Most of the different cut scenarios, designed to preserve the LSU academic medical centers in New Orleans and Shreveport, would shutter a few or many hospitals and would jettison some of the university's health care training programs.

All the scenarios would have needed legislative approval, either because a hospital would shut down or the cuts would reach a benchmark that requires decision-making from lawmakers.

Jindal administration officials say LSU must redesign its health care model to cut costs.

Health and Hospitals Secretary Bruce Greenstein said the temporary financing plans devised by LSU two weeks ago to keep all of its hospitals open this year and limit slashing to about $50 million gives the university "a transition period to look at ways to deliver services in a more sustainable fashion."

"The U.S. health care system has been changing dramatically over the last decade, and the LSU system has not kept pace. In order to make the system sustainable, it must change to have a stronger business model, to be more efficient and to focus on its core mission," Greenstein said in a statement.

University leaders said they are talking to community hospitals and private health care companies about possible partnerships that could shrink LSU's costs. Such a plan could include leasing the public hospitals to independent operators as a way to drum up cash and continue training programs.

However, in a July 25th draft memo, Cerise said those types of public/private partnerships take time to develop, need legislative approval and can't solve all of the LSU hospital system's financial problems.

"Even when fully implemented, I would not expect this model to replace the full amount of (Medicaid financing) that is being cut from the LSU budget currently," Cerise wrote to the university system's president, William Jenkins.

In one document, Cerise suggested using bridge funds to keep all university-run health facilities open until 2014, then tapping into Medicaid expansion dollars available under the federal health care overhaul law as a way to "sustain the enterprise."

Greenstein rejected that idea in a meeting with LSU governing board members and health officials.

Jindal is refusing to expand Medicaid in Louisiana, calling it too expensive for states and the federal government and an improper enlargement of government entitlement programs. The Republican governor is pushing for repeal of the health care law.

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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