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Hesitation welcome signal for health care redesign

Health care redesign into an efficient, sensible system for indigent care finally may be on the way in Louisiana, signaled by the Gov. Bobby Jindal Administration’s desire to review specifications for a new Medical Center of Louisiana – New Orleans (temporarily renamed “LSU Interim Hospital”) rebuilt hospital.

During his gubernatorial campaign last fall, one of the more prominent themes involved delivering health care in a more efficient manner – a crucial task since indigent health care costs are at about a billion dollars a year so better use of these resources could provide crucial cost savings as a predicted period of leaner state budgets loom. Yet barely a peep has been issued from Jindal concerning this issue since – until his Secretary of Health and Hospitals Alan Levine testified in front of a Senate panel yesterday.

Levine indicated skepticism at former Gov. Kathleen Blanco’s plan to build a grandiose new “Big Charity” in his refusal to move forward immediately with that plan. Blanco had envisioned this replacement facility for the one damaged by Hurricane Katrina and was one of the cornerstones for the plan that essentially retained Louisiana’s inefficient indigent care system, unique among the states, that primarily funnels to a handful of large, state-run institutions money for this care. This contrasts with the approach gaining acceptance in the rest of the country, where public money follows the person who then, guided by program rules, seeks out appropriate care at any eligible institution, private or public.

This approach, favored by the federal government, was rejected by the state which led to the federal government balking at providing $225 million for costs towards the hospital. Blanco then found a way to leverage other federal dollars into allowing the state to put up this money itself. But in doing so, she left the expenditure of it up to her successor Jindal who favors the alternative approach.

Blanco and her allies ideologically prefer the existing charity hospital approach because it keeps money in the hands of state government, as they believe big government knows best how to make health care decisions for individuals plus this arrangement provides more jobs to distribute. By building as big as possible a new Big Charity, it would commit the state to continue with this system in order to make sure its beds would be filled. The most enthusiastic partner in this attempt is the Louisiana State University system which runs the charity hospital system and thereby gains the resources and patronage opportunities from it.

Levine’s statement that a review may take a couple of months probably indicates the Jindal Administration is going to reject the palatial version of Big Charity, opening the gates for a money-follows-the-person system to be instituted. Since the indigent won’t be herded into state-run hospitals for care, there would be less need for large facilities. Reformers have argued that the LSU-run hospitals should really be focusing more on teaching in a more centralized fashion, and LSU’s dream of a huge facility was dealt a blow when its longtime partner in providing charity services Tulane University stated it believed a smaller hospital was more justified with current medical practice trends.

Jindal has not moved aggressively on health care reform simply because it may be the single most daunting task on his docket, requiring intermediate steps such as scaling down the hospital request. In the short run the transition also will cost money, and with an anticipated budgetary crunch ahead, he may be thinking a second term would be the time to start it. But aligning the hospital size with such a plan would create impetus for reform down the road, just as Blanco tried to do the same to prevent reform. Expect Levine near the end of the session in June to announce the Administration wants to move in the direction of a smaller, more sensible, facility.

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