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1.2.07

LA officials talking irresponsibly about health care reform

As might be expected, the health care redesign for Louisiana suggested by the federal government (which pays for much of it) was not well received by state officials – who, of course, have a vested interest in maintaining the present inefficient, ineffective system.

The federal government wishes the state to move to a money-follows-the-person regime for indigent health care, highlighted by state subsidies of private health insurance. Unique among the states, Louisiana presently has a money-given-to-the-institution system of charity hospitals that lack flexibility in choice for patients and has few incentives to operate efficiently. This paradigm shift is to facilitate universal health insurance coverage, with the federal government promising some assistance in the transition period in moving from the current system to their desired one.

But the institutions getting health care money presently don’t wish this system to change, and their chief apologist is the state’s Secretary of Health and Hospitals Fred Cerise. The state’s media don’t seem to press him on two issues that cast serious doubt on any defense of the current system. (If he reads this, maybe he’ll drop a comment to make such an attempt.)

First, if the charity hospital model is so right for the state, why doesn’t any other state employ it – and practically all of them have better health outcomes than Louisiana? Second, why would the redesigned model not work in Louisiana as well as it has in all other states – even in those that are “poor” like Louisiana?

What comments he has had on this issue, in defending the current system and disparaging the federal plan, ultimately ring hollow. For one, he claims that outcomes in the charity system as good as they are in the private sector in the state. But this claim charitably is misleading, and technically just flat wrong on what measurements of hospital quality exist. While the primarily teaching institutions in the LSU system (which runs the charity system as a whole) hold their own, or maybe a little worse against comparable private institutions, the several in the system that are not primarily teaching fare worse against the non-government sector institutions.

Cerise also claims that siphoning funding out of the charity system would reduce preventive care functions which an increased reliance on is one reason the federal model will produce better outcomes at reduced cost, defeating its purpose, he argued. That is a red herring: money could be removed from other aspects of the existing system, such as ridding the teaching infrastructure of waste by halting duplication and consolidating functions and programs.

But this attempt also misses the entire point of why the federal model will be better. Because the federal model introduces more competition since reimbursements will be based upon number of patients processed which in part reflects the quality of the institution, this dynamic spurs improved performance. But the funding for the charity hospitals largely is lump-sum; each gets substantially a fixed amount no matter how much business they attract or discourage.

The whole present scheme exists somewhat at the sufferance of the federal government – and that may the key to get Louisiana officials ultimately to do the right thing by going along with the federal plan. U.S. Health and Human Services Secretary Mike Leavitt indicated those dollars may not be forthcoming in the future. Cerise and company better listen or the coming health care funding crisis in this state, as costs of indigent care under the current system continue to balloon, will make the present and past ones look benign by comparison. (Eve former U.S. Sen. John Breaux, who never lifted a finger to implement this as a senator, now gets this -- scary!)

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