Call to make new Big Charity big reveals hidden agenda

The good old boys aren’t going to give up without a fight on the patronage and prestige that Louisiana’s two-tiered, government-run health care system gives them, if the latest attempt to justify the system in a backdoor way is any indication.

Recently, a report was issued, backed and paid for by the Democrat-run executive branch with the Democrat-lead Legislature’s blessing, that stated the ideal size of a new public hospital in New Orleans was not a smaller figure cost-conscious, mostly Republican, policy-makers such as Sen. David Vitter wanted, nor even a figure that supporters of a larger facility, mainly Democrats including the legislative leadership and Gov. Kathleen Blanco, had wanted. Instead, the bed figure with cost to match was at the upper range – 484 at $1.2 billion – of what anybody had anticipated.

One doesn’t have to be of suspicious nature to see quickly validity problems about this conclusion. The consultant was hired by the forces wanting to justify a bigger size – this requirement as a result of a stunning victory a couple of months previous for the forces against the larger size – and we know how that tends to make things turn out in this state: recommendations favoring more useless reservoirs, money-losing public hotels, taxpayer-draining sugar mills, etc.

But logic also fails to substantiate the claim. The basis on which the claim is made that larger is better is that if it’s “too small,” it won’t make enough money to pay off its construction costs. Two red flags immediately go up concerning that idea.

First, it makes the disastrous assumption often mistakenly made when government thinks it can do a better job than the marketplace at providing for efficient use of resources, the “Field of Dreams” error: build it and they will come. It assumes that the marketplace will be sufficient to fill the increased number of beds, meaning two things: that the market will be large enough, and that against the private sector a public hospital will be competitive enough to draw enough people in.

The study estimates that by 2016 the area population will be at 82 percent of pre-Hurricane Katrina levels. Given that would be an increase of 15 percent from the current rate in nine years, that is optimistic but not beyond believability. The same cannot be said for the other crucial estimate made in the report, that the patient mix would include 11.3 percent paying patients as opposed to the 10 percent historical level (note that means that currently 90 percent of patients seen pay nothing). “Big Charity” has not recently ever approached that higher level but the consultants cross their fingers and chirp loudly that modern facilities will encourage referrals there – and so, even if that worked, what happens when other hospitals themselves up the ante by redoing their facilities? Do Louisiana taxpayers keep paying through the nose to rebuild facilities in a chase for patient dollars?

Which demonstrates the second, disastrous, assumption made which directly impacts the related statewide issue of health care redesign – that debate being does Louisiana abandon its only-in-the-nation money-goes-to-the-institution philosophy of indigent health care, with its lower outcomes and greater expense, in favor of the money-follows-the-person system being steadily adopted by other states? That is, that the new Big Charity is primarily going to be an indigent care facility as opposed to a teaching hospital.

If Louisiana truly redesigns health care, existing charity hospitals will see drops in patient numbers, either forcing their closure or sale or reduction in size meaning there is no way a facility of the size imagined by the consultants ever would be financially viable. In fact, that would not be the purpose of an institution whose primary objective is medical education – by definition, there is an expectation that the state will subsidize the facility (and will reap tuition dollars as well) because it function is educative. Creating a facility designed at least to “break even” is relevant only when you plan to use the facility as a relevant cost center in a government-run enterprise.

This fact illuminates the strategy being employed here by those with vested interests in the current inefficient system: create a huge charity hospital in New Orleans, then try to justify retention of the existing system with it, bleating that the “sunk costs” of the new facility make pursuing real reform more expensive than keeping what already exists. It also demonstrates the suboptimal mindset these politicians have, that it is government’s job to directly provide full-spectrum health care, a view abandoned everywhere else in the country.

It’s a clever slight of hand that might fool those not attentive, but the fact remains that the non-government sector will do a better and cheaper job of providing health care than the government, that government policy should not provide disincentives to provide this care, and that building a larger Big Charity will be a costly mistake that unfortunately has become custom in this state, another example of putting politics before people.