LSU takes the ball and is going home

ummm, no, its not YOUR credit card, its the TAXPAYERS credit card

BATON ROUGE — The Louisiana State University System Board of Supervisors today rejected the draft governing agreement for a proposed teaching hospital in New Orleans, instead endorsing a revised model that board members said would give LSU more influence over the enterprise.

The next step in the governance wrangling is not clear, given that Tulane University’s governing board approved the original draft agreement in its own special meeting Friday, one day after state Health Secretary Alan Levine pitched the deal as the product of intense private negotiations between the two schools.

LSU System President John Lombardi said, “I assume it will go back to Tulane to see if they can live with the action we took here today.”

The principal complaint from LSU board members is that the Baton Rouge-based university system would have ownership of the hospital and responsibility for its bond debt, while having just four out of 12 spots on the governing board.

“It’s our credit card, and somebody else is going to lunch on it,” Lombardi said.

LSU called for an 11-member board, with five coming from LSU. Both versions would give Tulane and Xavier University one seat each, with other New Orleans schools sharing an additional seat.

The difference comes in “non-permanent” members that would not be affiliated with any of the schools. The Levine plan that Tulane approved calls for five of those seats. LSU’s plan includes three.

Lombardi said he pitched the same model in the negotiations with Tulane President Scott Cowen. Both men, Lombardi said, made it clear to Levine that they could not guarantee final approval from their respective boards. The deal was merely to present the draft, he added: “The secretary knew that some of our board members had concerns.”

Supervisor Hank Gowen said before the vote, “We need to be in control; we are the ones who are going to borrow $400 million,” referring to the minimum bond issue that would be necessary for the $1.2 billion hospital if the state gets $492 million from the federal government for damage to Charity Hospital.

If the Charity settlement is less than the full reimbursement, the proposed hospital corporation would either have to borrow more money or scale back its plans for 424 beds in the lower Mid-City facility.

LSU officials have bemoaned before and repeated today that the business plan for the hospital depends on LSU physicians directing privately insured patients to the new facility.

Lombardi told board members he asked Tulane repeatedly to make the same commitment. “That element of equity … was not supported and did not end up in” the proposed memorandum of understanding, Lombardi said, because of a “conflict of interest” with Tulane Medical Center.

Tulane University owns a 17.5 percent share of that for-profit hospital, with the rest controlled by controlled by Tennessee-based HCA, a publicly traded hospital corporation.

“If it is a conflict of interest, they should not be in this agreement,” Gowen said.

Board member Alvin Kimble said, “If Tulane has 200 out of 500 residents (in the new hospital), I’d like them to come up with 40 percent of the money. If we’re going to be on the hook for the money, we’ve got to have the ability to control the direction.”

System attorney Ray Lamonica told board members that the LSU System may not be legally on the hook for future bond debt, which would be issued in the name of the proposed hospital corporation. But, he said, “It’s certainly a moral and practical obligation if LSU ever intends to issue bonds again.”

Lombardi said he does not have a specific time frame in mind for the next step in the hospital planning process. LSU Board Chairman Jim Roy called the vote “the beginning of a dialogue.” Lombardi modified that to “a new beginning.”

Lombardi declined to speculate whether today’s vote will send lawmakers into a mad scramble to settle the issue through legislation before Thursday’s final adjournment of the regular session.

House Speaker Jim Tucker, R-Algiers, earlier this year introduced House Bill 830 that would have stripped LSU’s control of the hospital altogether. Tucker abandoned the bill last week when Levine announced the draft governance deal.


~ by maringouin on Monday, June 22, 2009.

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