hemming and hawing

Jindal appears to be putting the brakes on the new state hospital in New Orleans

that damn building will never get built – you heard it here first

BATON ROUGE — The Jindal administration’s plans to reassess the details of a proposed $1.2 billion, 484-bed teaching hospital in downtown New Orleans are raising some concerns about the future of the facility designed to replace the city’s hurricane-damaged Charity Hospital.

Health and Hospitals Secretary Alan Levine said this week that he wants to hire outside experts to “challenge the assumptions” in a business model developed last year that said the new hospital would be financially viable.

Levine, who is Gov. Bobby Jindal’s point man on the project that Louisiana State University would build in partnership with the U.S. Department of Veterans Affairs, said he is worried that the hospital’s current configuration is too expensive and might not qualify for bond financing.

He did not identify which consultant he plans to use, nor did he lay out a time frame for when the review might be finished. He said the money to pay the consultants would likely come from a $74.5 million financing pool that the Legislature approved last year for land acquisition and design of the hospital.

“I don’t think it’s a lot to ask to make sure that the project makes sense financially,” Levine said, adding that he wants to make sure there is enough money to not just build the hospital, but also to cover its operational expenses over the long haul.

“You’re talking about 1.2 billion dollars. You’re talking about effectively encumbering our state’s safety-net money for 30 years. So I don’t think it’s inappropriate to ask,” Levine said.

But some lawmakers, noting that the original report was commissioned by the state and touted as an independent assessment by a major consulting group, said another review raises questions about the Jindal administration’s commitment to the project.

“There are rumors that this is a delaying tactic,” Sen. Edwin Murray, D-New Orleans, said Friday. “We know that LSU is now solidly behind the project, but after the session the governor will be able to make new appointees to the LSU Board (of Supervisors).”

Senate President Joel Chaisson II, D-Destrehan, said he didn’t know the details of Levine’s plans for a review, “but I don’t know how you go against the findings of a reputable consultant.”

Jindal: Review ‘prudent’

Jindal said Friday that he remains committed to building a new downtown hospital and that he still envisions the VA as a partner in the project. But he said he is concerned about the cost and the size of the project. But he said he is willing to accept the figures if the review of the business plan finds that they are warranted.

“If the analysis comes back and verifies the initial business model, that’s fine,” Jindal said. “But I think it’s simply prudent (to seek outside review) before the state makes this incredibly large investment.”

Jindal also sought to allay concerns expressed by some New Orleans lawmakers that financing for the project would be delayed while the review is under way.

“The availability of state funding will not slow down the construction of this hospital,” Jindal said. But he did not say whether the non-cash line of credit would be included in the capital construction bill that is expected to be unveiled next week.

House Speaker Jim Tucker, R-Algiers, said he has been told of no deadline for completing the review, but he hopes it would be done by July 1. He conceded that could be too late for the hospital to be a significant part of the Legislature’s debate on the state’s fiscal 2009 construction budget. The capital spending plan must be adopted during the general session that begins Monday and must end by June 23.

In the meantime, Levine has asked LSU officials to explore alternatives to building a new hospital, said Dr. Fred Cerise, LSU’s vice chancellor for health affairs and medical education. One idea is to expand Tulane University Hospital to accommodate LSU.

“He has thrown out a number of ideas, but they’re just that — ideas of things to think about,” Cerise said. “We’ve received no formal proposal or anything of any substance to think about in this regard. .¤.¤. Obviously that’s very different from the two years of planning (for the new hospital) that have gone on to date.”

Grand vision

State officials envision building a pair of hospitals that would serve as a training hub for medical students and post-graduate residents from Tulane University and LSU while sharing some support facilities. The hospital would focus on specialty care such as neurosurgery and orthopedics while also treating a large percentage of the region’s uninsured residents.

The business plan, developed last year by Adams Management Services Corp. and Phase 2 Consulting, assumes that LSU would claim a bigger share of the New Orleans-area health-care market by 2016 than it had before Hurricane Katrina and that the new hospital will attract nearly double the number of paying patients than Charity Hospital did before the storm.

About $400 million of the cost would come from state sources and money that Louisiana hopes to recoup from the federal government to compensate for the damage done to Charity Hospital by Katrina. The rest, about $800 million, would be covered by bonds that would be backed by revenue generated from treating patients.

The cost and size of the proposed hospital have drawn sharp criticism from private and nonprofit hospitals in the region, and they appear to have found an ally in Levine, who was recruited from Florida to join the Jindal administration and whose background includes stints as a private hospital administrator.

Levine said he wants the review to determine what effect a new hospital would have on existing hospitals, many of which have said they have been hemorrhaging money since Katrina.

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~ by maringouin on Saturday, March 29, 2008.

 
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