Painful cuts point out need to dismantle charity system

While mid-year budget corrections disrupt optimal planning, and Louisiana’s fiscal structure exacerbates the problem by shielding much, some low-priority areas, from reductions to force them upon very few and higher-priority areas of state government, the silver lining again is the opportunity for the exercise to accelerate beneficial reform – as one state legislator accidentally may have discovered.

To be implemented immediately, joining the rest of higher education and also other areas of health care provision, Louisiana’s charity hospital system for the remainder of the fiscal year will suffer cuts that officials predict will have a measurable impact on service provided to the indigent. These also will slice a few hundred jobs off of the state payroll.

State Rep. Joe Harrison seemed rather miffed that one such facility in his district, Houma’s Leonard J. Chabert Medical Center, would endure such belt-tightening, to the tune of 80 positions and $2.9 million less. He publicly announced he would investigate in the upcoming session to separate the facility from the Louisiana State University System that runs these hospitals and create its own independent district.

But Harrison’s proposed solution betrayed the wrong mentality that has led Louisiana to operate this inefficient, lower-quality system. He wants to rope in a nonprofit and another local public hospital and build on the hospital district of the latter. Of course, this moves in the opposite direction of the state’s policy dealing with indigent care, debuting only days ago with the start of the Bayou Health plan that will encourage the majority of Medicaid patients, through a variety of coverage plans administered by non-governmental entities, to use a wide variety of facilities for health care and not just charity hospitals.

Rather, with Chabert and most of the other hospitals currently in the system – exceptions being the medical centers in Shreveport and New Orleans, which would focus mainly on education – the state needs to come up with a divestment plan for these. As Bayou Health increases in scope, the existing hospitals like Chabert will experience reduced demand. It would be to the state’s advantage now to come up with a plan to sell off these assets so they can position themselves as soon as possible to make the transition away from being state-owned, which will also increase the remuneration it can receive for their sales to the private sector, nonprofit sector, or to local governments.

In the process, it also must pay attention to transitional matters as well, such as the fact that Medicaid coverage for behavioral health issues is scanty and therefore reducing access to other facilities for the indigent. It could build upon a model in Rapides Parish, where a smaller facility is getting built to service those needs specifically. Smaller state facilities in the areas where charity hospitals currently operate would make the transition out of state ownership, and placement in other areas too, could address this need.

Harrison and his colleagues need to work on this holistic solution, recognized by his colleague (and son of the man for whom the hospital in question is named) state Sen. Norby Chabert, who acknowledges that state hospitals have as a primary mission teaching and that the indigent may be better served in other ways. The introduction of Bayou Health only accelerates the necessary transformation that finally may put the anachronistic charity hospital system to rest. That the present reductions that the system must endure increases awareness of this reality makes them somewhat easier to take.