In a letter to Gov. Bobby Jindal Thursday, U.S. Sen. David Vitter teamed up with Speaker of the House Jim Tucker and Louisiana Treasurer John Kennedy to offer a new proposal for the University Medical Center in New Orleans. They say the plan will increase the bed capacity and lower the overall cost.
In the letter, Vitter et al again highlighted the state's own Kaufman Hall study showing that the current Mid-City hospital plan is unsustainable and offered their own proposal that includes buying Tulane’s privately owned facilities.
That the proposal would come from Vitter and Kennedy is no surprise, as both have maintained that the Mid-City plan is too large and would require a more than $100 million tax subsidy annually. Tucker, however, had previously supported LSU’s model. The Times-Picayune reported Thursday that the speaker now says political and fiscal realities in Baton Rouge have changed over the course of the hospital planning. The letter comes very late in the game, the T-P points out, as a groundbreaking ceremony for the new facility was held last month in Mid-City and the UMC board is developing a business plan with the intent of selling high-yield bonds for construction by the end of the year.
“We are very concerned that the Charity Hospital rebuilding plan as currently proposed (424 beds, $1.2 billion) will saddle the state with large new capital and operating costs for years to come. As you know, Kaufman Hall, a nationally recognized firm of health care experts that your own hospital board hired to study the issue, has issued a report which validates and underscores these concerns,” the trio wrote.
They requested a careful study of their proposal, which they call a fiscally responsible plan that would yield a 600-bed capacity, offering even greater opportunity to host a broad array of specialties and sophisticated practices than the current proposal. Vitter et al say their plan could be be accomplished without the proposed $400 million of new borrowing at high interest rates by the state that is part of the current plan. They also note:
• It would greatly minimize or avoid the need for major operating subsidies (possibly $125 million per year according to Kaufman Hall) from the already strapped state budget.
• Far from delaying the project, this alternative plan can clearly be executed far more quickly than the current proposal of building a new mega-hospital from scratch.
• Buying the current Tulane-HCA facility as part of the plan not only acquires 354 beds at relatively low cost per bed, it also acquires a net revenue stream of $400 million per year and a robust, already existing private-pay book of business.
• It helps ensure that the new hospital is managed efficiently versus continuing the state and LSU’s very inefficient management.