The Facts about the proposed LSU Hospital in New Orleans
1. Why does LSU need a 484 bed hospital?
The hospital will be used both by LSU and by Tulane for their training programs. The
484 bed hospital was recommended by consultants that were hired by the State Office
of Facilities Planning, not LSU. Its size is based on the need to have a hospital
large enough to accommodate both insured and uninsured patients in order to be financially
viable. The 484 beds is substantially smaller than the bed occupancy at University
and Charity before Katrina.
At this size, the hospital will have a positive cash flow from year one even if it
takes in only a small number of private patients. The consultants estimate that the
hospital will need to increase its market share of Medicare and Commercial patients
from 2.6% (pre-Katrina) to 5.2%. It is designed to provide Level I Trauma and other
care that the private hospitals should not be obligated to provide.
The new hospital will provide a place to train the medical students, nurses and allied
health professionals which amounts to over 2000 students.
2. Why doesn't LSU just train all of its residents in private hospitals?
LSU needs a modern, teaching hospital to attract the best teachers, residents, and
students. Such a hospital fosters the “hands-on” experience they highly desire. Currently,
LSU has residents in 15 private hospitals. The local private hospitals lack the capacity
to absorb many more trainees.
Each year, physicians go through a “match” through which they select the institution
in which they wish to train. Prior to Katrina, Charity was the magnet that attracted
young physicians to stay in Louisiana to train. Residency numbers are down nearly
25% from pre-Katrina levels. Of those residents who did match in New Orleans, many
are international graduates. Although they are of high quality, they are unlikely
to stay in Louisiana to practice. Unless LSU trains more physicians for Louisiana
to retain, we will face a severe shortage in 10 years. LSU needs its own hospital.
3. Isn't the public hospital system outdated and backward?
In most states, county or city governments are responsible for caring for the uninsured.
In Louisiana, it is a statewide system where uninsured patients don't have to worry
about being eligible for care when they cross parish lines.
4. Isn't LSU going to just reproduce the present “two-tiered” system?
The term “two-tiered” refers to financing access to care, not the quality of care.
Funding determines access. Historically, Charity Hospital has had to cut services
because of limited funding. The business model for the new hospital is a huge break
from the past. By changing the payer mix to increase the number of Medicare and Commercial
patients, the hospital will be self-sustaining from the first day of operations. Furthermore,
the hospital will be able to treat a larger percentage of the uninsured providing
relief to the private hospital emergency rooms that have been overwhelmed post Katrina.
Building a hospital that is too small will perpetuate the two-tiered system because
the uninsured population would utilize the overwhelming majority of beds which would
severely limit the hospital's ability to diversify its payer mix.
The new hospital is only part of the safety net. Before Katrina, the system didn't
have satellite clinics - primary care centers for checkups, non-emergency services
and chronic disease management - but LSU will open six such clinics in the city to
provide patients a medical home to receive primary and preventative care.
5. Isn't the Charity system responsible for Louisiana having the highest Medicare
costs and poorest outcomes?
According to the Louisiana Health Information Network database administered by the
Louisiana Hospital Association, the state's private hospitals provided more than 96
percent of all Medicare services from January to June 2005. LSU hospitals provide
high quality care to the small number (3.4%) of Medicare patients that it treats.
Louisiana would rank among the top 10 states in the country in Medicare quality outcomes,
including costs, if the state ranking is based only on MCLNO's Medicare figures.
6. Why do you need to spend $1.2 billion?
The $1.2B covers land acquisition, finance and equipment costs in addition to covering
the construction costs. It will be built to survive and operate even after a Category
5 hurricane. The cost will be covered by a combination of state funds, bond financing,
and federal funds. At the proposed bed size (484), the hospital will be profitable
from the first day of operation by increasing the amount of patients with third party
coverage.
7. Why don't you just renovate University and Charity Hospitals?
As much as people don't like to hear it, Charity was a troubled 70+ year old hospital
before Katrina. It then suffered extensive damage. Bringing it back to even partial
use would be time consuming and expensive. Because it has been closed for so long
the State- and not LSU- controls its further use.
University Hospital was renovated after Katrina, to the extent that it can be renovated.
It too is old and too small to meet the state's educational and healthcare needs long
term.
8. Why partner with the VA?
Partnering with the VA is projected to produce operational savings of at least $400
million over 25 years. The two entities will share equipment such as CT and MRI equipment,
automated labs, etc. and infrastructure, such as power plant, food services, laundry,
etc. Both VA and the new teaching hospital will have dedicated inpatient and outpatient
units for their respective patient populations and services such as surgery, pharmacy,
therapies, and administration, but may share services such as emergency/trauma, imaging,
ambulatory service, medical and facilities support, information and communications
technology, and laboratory. Moreover, partnering with the VA will enhance research
and patient care and serve as the backbone of the medical district.
9. Why not move the Medical School to Baton Rouge and minimize future risk?
You can't move just the School of Medicine. The Medical School faculty teaches in
the Dental School, the School of Public Health, School of Allied Health, School of
Nursing, and the Graduate School. All the schools would have to move leaving a total
of 22 buildings vacant. It would cost more to move all the Health Science Center to
Baton Rouge than to build the Hospital here. Since Katrina almost all the LSU buildings
have had hurricane upgrades paid for by the Federal Government; so they are better
than before the storm.
10. What happens if this project is delayed?
The VA may re-think its commitment, costs will escalate and people will lose hope.
Current escalation is tracking about 1% of the project cost per month or $10 million/month.