State budget crunch: Gov. Edwards cuts four hospitals
18th April 2016 · 0 Comments
By Christopher Tidmore
Contributing Writer
In his testimony Tuesday, April 12, 2016 before the State House Appropriations Committee, Commissioner of Administration Jay Dardenne said that he and his staff met with the heads of the Department of Health & Hospitals and asked for a prioritized list of cuts. As a result, four regional hospitals will lose almost all state funding, though none in New Orleans.
In order to balance the $750 million deficit, the Edwards Administration proposes slashing state general fund dollars for DHH by $408 million and reducing TOPS funding by $183 million. Higher education would see cuts of $46.1 million, corrections cut by $34.1 million, the judicial branch by $15.9 million, and the legislative budget by $7.3 million.
The first two reductions, which would protect hospitals with post-med school residency programs and scholarships for matriculating undergraduates with ACT scores of 25+, might constitute the only difficult choices available in order to prevent an exodus of high-performing medical and college students. Yet, this meritocratic method of slashing the budget also creates a particular GOP constituency who might prove sympathetic to a state tax hike after June 6.
Recounting his meetings with DHH senior staff while formulating the proposed budget, Dardenne recollected to Appropriations Committee Chair Rep. Cameron Henry, “We asked them not to throw the panic button…Not to freak out.”
The state would end funding to four regional hospitals, but the Commissioner (and former GOP Lt. Governor) noted to Henry that he was “hopeful” that the state would find the extra revenue in the highly expected June Special session. Tax hikes can be considered then, whereas the State Constitution prevents them from a legislative vote during the current Regular Session.
The comment led Committee member cutting some hospitals by 3% and others by 100 percent.” Her objections were hardly surprising. Dardenne’s budget would essentially end state funding to the major hospital in Houma, upon which her East Acadian constituents depend.
“We were cognizant that this would create a void in the areas where they were served,” Dardenne consoled, hoping that June tax increases will allow the defunded hospitals in Houma, Pineville, Alexandria, and Lake Charles to have their government funding for the public-private partnerships restored.
The Edwards’ Administration’s criteria for funding a hospital in the current budget was based on the numbers of doctors who were completing their “Residency” program at that medical facility. If hospital constituted a prime destination for med students completing their training, the facility would maintain 97 percent of its state funding.
The idea was to prioritize hospitals that worked directly with medical schools, making sure that the 1,938 MD Residents in Louisiana would be freed from anxiety over completing their education here. Since most are expected to work as MDs here in the Pelican State — if they are able to complete their residency in Louisiana — cutting substantial funding to these hospitals would create a doctor shortage that could take a generation to repair.
If the residents leave, the logic goes, the doctors may be gone forever.
And, the reputation of Louisiana Medical Schools would soon follow, creating a healthcare infrastructure death spiral that would require years and billions of dollars to untangle.
Only one non-medical school associated hospital, the facility in Monroe, was exempt, due to the fact, Dardenne explained, that there were no other hospitals in Northwest Louisiana. Moreover, quite a few of the Shreveport-LSU Medical School trained doctors were completing their residency in Monroe.
Houma, Pineville, Alexandria, and Lake Charles did not prove so lucky. Yet, these Republican areas are not the anti-tax ideological hotbeds that Bossier, St. Tammany, or the B.R. suburbs often are. They tend to elect practical Republicans often more responsive to local needs than GOP purity.
Consequently, match Republ-ican legislators from these areas with Democratic allies of the Governor, and much of the struggle to reach the constitutional threshold of two-thirds legislative majority to raise taxes has been overcome. Hospitals in these working-class areas depend upon state funding of the public-private partnerships to survive. By threatening the likely closure of four critical hospitals, Dardenne and Edwards unveiled a surefire way to garner support for a tax increase from Republican legislators from four regions of the state who otherwise might have been hesitant.
The Administration had another option fiscally.
If Edwards’ staff had cut hospitals 30 percent across the board everywhere, however, while the state would have seen an exodus of resident doctors in training, these hospitals would still be operating — at least to outside observers. Since the damage would not be felt for a year or more, lacking ostensible public pressure, GOP legislators from the four regions might have punted the fiscal problem past the June Special Session.
Now, it is a choice between a tax and the closure of their hometowns’ major medical facilities.
The rest of the pathway to getting a majority of the GOP caucus in both Houses to join the Democrats in a tax increase after June 6th comes through the Taylor Opportunity Program for Students.
Some senior Democrats had called for means-testing the TOPS program, as a means of achieving the $183 million in reductions. That would have cut middle class support for the scholarship program, likely convincing many Republicans to opt against a tax increase to save it. By following Dardenne’s advice to raise the TOPS standards from an ACT score of 20 to 25, the program still provides scholarships to all.
The program remains a middle class entitlement, just with qualifications out of reach to the average mid-range student. In point of fact, Pat Taylor reassured legislators during the Foster Administration that costs of TOPS would be controlled by precisely the method of raising the scores to qualify. Edwards can wrap himself in the words of that senior La. Republican defend his cuts.
Nevertheless, reducing students qualifying for TOPS from 51,000 to 17,400 makes a lot of suburban parents realize that they now have to cough up tuition payments. Calls to their legislators to back a tax hike suddenly seem more possible.
The challenge for Edwards and Dardenne will be their closest allies in the Legislative Black Caucus, who are ardently against any further sales tax increases. That is roughly the only tax that can be passed quickly. Income tax hikes require constitutional amendments (though deductions can be statutory removed).
If Republicans were to answer the call for more revenues, and hike sales taxes again in the proposed June Special Session to keep those hospitals open and TOPS fully funded, would African-American Democrats rebel? After all, the teaching hospitals in Shreveport, New Orleans, and Baton Rouge were untouched. Their constituents feel little medical loss in Edwards’ new budget, and reports estimate that HBCUs’ hit as it relates to TOPS will be minimal.
This article originally published in the April 18, 2016 print edition of The Louisiana Weekly newspaper.
