A fiscally responsible plan for big Charity in New Orleans

Hurricane Katrina damaged the Charity Hospital in New Orleans, which is owned and operated by the LSU Health Sciences Center (“HSC”). The state and federal governments have put up $800 million to build a new facility. Today, six years after Katrina, no hospital has been built.

The problem is that HSC has proposed to build a 424-bed hospital costing $1.2 billion, which means that taxpayers would have to borrow an additional $400 million to complete construction. Kaufman Hall, a nationally recognized firm of healthcare experts hired to analyze the HSC plan, has concluded that the new hospital “as currently envisioned, is materially larger than is supportable,” and will require at least $100 million of taxpayer money each year from the state to break even.

Last week, the three of us put forward a more fiscally responsible plan to Governor Jindal. Our plan would have HSC buy the Tulane-HCA Hospital downtown and build a smaller, 250-bed hospital near it. This would avoid adding net new hospital beds to the New Orleans market, which already has a higher number of beds than the national average for the size of its population.

Our plan would result in a new facility being built faster, bigger and cheaper than the current HSC plan. It would result in 42 percent more beds (though fewer new beds) and cost $400 million less. Taxpayers would not have to borrow any money. Our plan would result in a leading academic medical center that would create new healthcare and research jobs, provide excellent healthcare for the truly poor and others, help train our next generation of doctors and other healthcare providers, and not be a burden to Louisiana taxpayers.

Our plan also calls for the new hospital to be managed by an independent, expert firm, under the direction of a public board of directors, to ensure that the facility would be managed efficiently. According to the recent HSC-commissioned Alvarez Marsal report, the interim Big Charity in New Orleans cost per patient per day was $5,031 compared to $2,794 for similarly sized teaching hospitals in other states.

We can do better. Taxpayers deserve better.

The governor has agreed to have Kaufman Hall evaluate the Vitter/Tucker/Kennedy proposal. We think our ideas make a lot of sense, especially for our taxpayers.

Louisiana doesn’t need to raise taxes. We just need to manage our money better.

– U.S. Senator David Vitter

– Jim Tucker,
Louisiana House Speaker

– John Kennedy,
State Treasurer

This article originally published in the June 27, 2011 print edition of The Louisiana Weekly newspaper.