Max Insights: Louisiana seeks to privatize many hospitals

By Alan Cherry

Throughout 2013, Louisiana state government enacted a plan to sell and close hospitals that comprised LSU Health Care Services Division (HCSD) (Baton Rouge, La.). According to the policymakers, the safety-net health system was losing money, and the privatization aims to save the state $100 million annually.

During Q1 and Q2 of 2013, HCSD transitioned five of its seven hospitals to public-private partnerships. HCSD will work with each of the partners on accountable care services, according to reports. HCSD also plans to maintain its practice-based improvement network and healthcare effectiveness programs, to measure against existing standards, identify new medical evidence, and identify and optimize opportunities for improvement.

The following is a list of the hospitals converted in 2013 and their corresponding new owners:

  • Earl K Long Hospital: Our Lady of the Lake Regional Medical Center
  • Interim LSU Public Hospital: Louisiana Children’s Medical Center (LCMC)
  • Leonard J Chabert Medical Center: Ochsner Health System
  • University Medical Center: Lafayette General Health
  • Moss Regional Medical Center: Lake Charles Memorial Health System

Two of HCSD’s remaining hospitals, Bogalusa Medical Center and Huey P Long Medical Center will make the transition this year. Bogalusa Medical Center is scheduled to convert to private operation March 17, 2014. Franciscan Missionaries of Our Lady Health Center Systems (Baton Rouge, LA) will take over the hospital, which will be renamed “Our Lady of Angels Hospital.” CHRISTUS Saint Frances Cabrini Hospital and Rapides Regional Medical Center will take over the services at Huey P Long Medical Center, following its closure which is anticipated before the end of 2014. Huey P’s Inpatient and emergency room services will be split between Cabrini and Rapides, and CHRISTUS will take over all inpatient psychiatric services. The state will pay the two private hospitals $49 million annually for uninsured care. Huey P Long’s clinics would be closed, which would force the two private hospitals to build new clinics in the region, with the majority of the costs paid by the state.

Final approval must wait until the Louisiana legislature holds its 2014 regular session. LSU HCSD agreed to pay as much as $15 million to CHRISTUS Saint Frances Cabrini Hospital and Rapides Regional Medical Center as part of the privatization Huey P Long. The funds will be used for construction of three outpatient, urgent care, and medical specialty clinics, as well as a psychiatric unit expansion at CHRISTUS.