New Orleans teaching hospital that would replace charity will require state funds

Louisiana Department of Health and Hospitals Secretary Alan Levine on Thursday said that a 424-bed $1.2 billion teaching hospital planned to replace Charity Hospital in New Orleans will not turn a profit, as the original plan had stated, and that it would require state money to become sustainable, the New Orleans Times-Picayune reports (Moller, New Orleans Times-Picayune, 6/20).

Gov. Bobby Jindal (R) endorsed the hospital plan on Wednesday, which would provide care for 70% of the region's uninsured residents, less than a plan that had been proposed by former Gov. Kathleen Blanco (D). Charity, which was shuttered after Hurricane Katrina, provided care for 63% of the region's uninsured residents (Johnson, Baton Rouge Advocate, 6/19).

According to a revised plan released on Wednesday, the hospital will require $105 million in state general fund support when it opens in 2012, with the amount of money gradually decreasing over time. If the state does not build the facility, subsidies needed to maintain operations at the Louisiana State University Interim Hospital would grow to $184 million annually by 2016 (New Orleans Times-Picayune, 6/20).

State Sen. Bill Cassidy (R) said the new plan would require more money for uninsured care to be diverted from other areas of the state. The New Orleans area has 22% of the state's uninsured residents but gets 43% of the funding, according to Cassidy. Cassidy has proposed legislation to change the way funds are allocated.

Levine noted that a new analysis reduces the uninsured dollars required for the new charity hospital from $316 million to $189 million. He said, "We tried to mitigate what I think would have been a terrible fight over those dollars." However, Levine said that additional state financial support could be required if revenue bonds are sought to finance the hospital and that those backing the borrowing could request access to uninsured funds (Shuler, Baton Rouge Advocate, 6/20).

Levine said he expects construction to begin within one year and be complete in three to four years (Baton Rouge Advocate, 6/19).