SURPRISE! Louisiana's Privatized Charity Hospitals Come In $52 Million Under Budget

jindal hospital

Go figure, right? We all just KNEW that privatizing a bunch of government-run hospitals for poor people would explode the budget. Because that’s happened…never.


Louisiana spent $52 million less than was budgeted for Gov. Bobby Jindal’s privatization deals for the LSU hospitals that provide care to the uninsured in the recently ended fiscal year, according to data provided by the state health department.

Jindal’s health secretary, Kathy Kliebert, said the hospital’s new managers are improving care while also running more efficient operations.

“We feel really comfortable that they are managing their budgets, that their new cost structures that they’re setting in place are working, and at the same time we’re getting really good quality care,” Kliebert said in an interview.

What you’ll hear from the other side, including Sen. Sherri Buffington (R-Shreveport) who’s so conservative that she wanted to conserve the government hospital in Shreveport as it was before the evil Bobby Jindal leased it to the Biomedical Research Foundation of Northwest Louisiana, is that the savings came on the backs of The Poor. More specifically, that when LSU was ramping down its operations in preparation for the transfer of the hospitals all the uninsured patients the state was paying for twice (the state picks up the tab for indigent health care, plus it was paying for the brick-and-mortar costs of the charity hospitals) were going to other private hospitals for care and those hospitals aren’t getting reimbursed.

That’s the story, anyway, though it’s a little surprising that we didn’t hear a constant screaming about that inundation throughout the state while the changeover was going on. In fact, there’s pretty good evidence indicating that the private hospital managers have managed to cut wait times down for prescription fillings and it’s never been easier for an indigent patient to gain admittance to a clinic.


If you’re not familiar with the back story about this fight, prior to Jindal’s arrival in Louisiana’s governor’s mansion the state operated a system of 10 public “Charity Hospitals” originated by Huey Long in the early 1930’s. The Charities ultimately grew into a massive expense estimated at some $600 million in brick-and-mortar costs to the state every year, and intermittent calls to do something about them ultimately were rewarded with the brilliant idea to have LSU run them, ostensibly as part of the university’s two medical schools. So politically, making cuts to the wasteful Charity system would be making cuts to LSU.

And outside of special circumstances – for example, if you happen to get shot in New Orleans, the Charity Hospital in that city is absolutely the best place to go, because nobody outside of the military has more experience dealing with gunshot wounds – regular folks never used the Charities. Some 96 percent of the patients were either on Medicare, Medicaid or didn’t have insurance. So those brick-and-mortar costs were all but completely sunk, since the state was paying itself for all but four percent of the patients.

Jindal created a fairly massive stink a couple of years ago when, under the ambit of a midyear budget cut, he leased six of the Charities to private hospital operators and closed down or consolidated three others. The Governor’s allies will tell you there was no other way to effect such a policy, but he paid a rather hefty political price for having done so – because by not going through the legislature to dismantle the system, he doesn’t have any committed allies. So when people whose job circumstances changed as a result of the change in policy called their representative or senator, rather than an explanation of how public brick-and-mortar hospitals are an obsolete model that had to go away sooner or later what they got was “I feel your pain; that damn Jindal really stuck it to us.”


Which is cowardly, but it’s also easy. Politicians, particularly mediocre ones, like easy.

And of course, this was going to be the death blow to health care in Louisiana.

We’ll get a fuller accounting of how the money truly worked out with this change. in a couple of months. And we’ll know next year, after the first full year of the implementation of Jindal’s idea to privatize the charity hospitals, exactly how much money is saved.

But if you’ve paid casual attention to the Charity privatization, you might be at a loss to summon up memories of dead bodies due to neglect as a result of the privatization. If there are oodles of corpses littering the roadsides outside of hospitals throughout Louisiana for lack of admittance, they’ve gone strangely unreported. And one would expect that’s not a story – Jindal closes government hospitals, pawns them off on greedy corporations, patients suffer and perish – Louisiana’s media would ignore.

There is no story. Nobody suffered from the leases of those hospitals. And the state is going to save a lot of money as a result, while likely delivering better services to the public. And since you can use a private hospital for medical instruction just like you can at a public hospital, the LSU medical schools in Shreveport and New Orleans will do just fine.

The Charity Hospitals were a Third Rail Of Louisiana Politics for decades. Jindal came along and grabbed it with both hands as the legislature ran for the treeline. And guess what? Nothing much bad has happened. Those hospitals got privatized, and they’re going to be fine.


Crossposted at The Hayride.


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