In Budget Debate, House GOP Leaders Reveal End Game Plan

“A bill that looks like that will not leave my desk: no medical schools; no partner hospitals; 46,000 people losing waivers and nursing home beds; TOPS short $58 million; a $168 million loss of lease payments; Department of Corrections loses $20 million; DAs and sheriffs go backward; no budget passed for the judiciary at all today,” Gov. John Bel Edwards said. “Today’s version of the budget is a complete failure, and I have no fear that this HB 1 will become law.” As the governor met with the media following House adjournment, he condemned their version of the budget as “foolishness”, yet found a ray or two of hope in what had been said on the House floor. “I am heartened because some House leaders said there clearly is a need for a special session to address the shortfall in revenue. And the sooner we get into a special session, the better,” he said. That did seem to be a revelation during the House’s budget debate, as Democrats questioned Appropriations chairman Cameron Henry (R-Metairie) and House Republican Caucus chair Lance Harris (R-Alexandria) about the impacts of the funding allocations. “Are you in favor of another special session?” Rep. Sam Jones (D-Franklin) asked Harris. “Yes,” Harris replied. “So we can finally fully solve this problem?” Jones pressed. “If we pass this budget out of here, which we are constitutionally obligated to do,” Harris said. “Are you willing to vote for some revenue to fix this?” Jones quizzed Henry. “I was willing to vote in the special session, but wasn’t given the opportunity to vote on what I wanted,” Henry replied. “What did you want to vote for?” Rep. Ted James inquired. “Clean pennies,” Henry answered. “You did have the opportunity to vote on that,” James responded. “You voted no – twice. Why do we need to vote on this budget now?” “To move the process along,” Henry said. “This isn’t the final say, after all. This is just the third draft, and as we all know, the Senate is going to have two more working versions before it comes back to us.” But as the governor observed, “The Senate cannot fix this. Maybe some House members think so, because the Senate has helped fix the budget before. It’s not possible this time.” Yet if you watched and listened closely to the entire budget debate, it’s fairly obvious the House Republican leadership does finally have a plan for solving the state’s budget woes– one that’s entirely in alignment with their “live within our means, cuts-only” mantra. They intend to eliminate the state-funded public hospitals. Conservative blogger Scott McKay gloated about the plan late Thursday afternoon, calling the hospital system “a leftover from the Huey Long socialist history of Louisiana and with changes to federal policy it’s totally unsustainable.” Indeed, for several years now, Louisiana Republicans from Sen. Conrad Appel to LABI president Steve Waguespack have been urging an end to “Huey Long-style” government. Long, of course, expanded Charity Hospital into a statewide system and created the LSU Medical School to cooperatively staff it. During Thursday’s budget debate, it was made clear – once again – that with the FY ’19 level of funding for what are now public-private partner hospitals, those partnerships will end, effective July 1. Staff at those facilities will be laid off, and graduate medical students will have nowhere to fulfill their residencies. Additionally, it will blow another $168 million dollar hole into the budget, with the private partners not making their annual lease payments to the state. “Do we have to get CMS approval for the hospitals to close?” Rep. Jay Morris (R-West Monroe) asked LDH Undersecretary Jeff Reynolds, who had been summoned to the House floor to answer questions. “DSH (Disproportionate Share Hospital payments) is the most optional of the federal dollars the state receives,” Reynolds replied, “So that wont be a problem with CMS (federal Centers for Medicare and Medicaid Services).” “So if the hospitals close, they will get very little in supplemental payments?” Morris inquired. “They will still get Medicaid reimbursement, but at the standard rate,” Reynolds answered. “Some partner hospitals get reimbursed at higher rates than others, isn’t that so?” Rep. Tony Bacala (R-Prairieville) queried. “444% of cost for one, and as low as 49% of cost for some of the others?” “Yes, the distribution is not equitable,” Reynolds acknowledged. “We pay $3 billion a year to all the hospitals in the state, with 31% for direct services, but we pay the partner hospitals an additional 61% in supplemental payments. The national average is ten percent,” Bacala said. “Do any other states have public-private partnerships with hospitals like we do?” “I’m not aware of any at the state level, but some do have these sorts of arrangements at a county level,” Reynolds replied. “So no other state has a system of private partner hospitals drawing money away from our health care system?” Bacala pushed his point. “Your points are accurate,” agreed Commissioner of Administration Jay Dardenne, who had also been called to the floor to answer members’ questions. “But two things: one, we didn’t create this system of public-private partnerships. That was done by the previous administration, and we inherited all its problems.” That generated cheers and applause from a substantial number of House members. “And two: Louisiana has long been the only state with a state charity hospital system. It may be time to move away from that, but it won’t happen overnight,” Dardenne said. “And it won’t happen if we devastate our entire health care system by passing this budget today.” “I agree this administration didn’t create the system,” Bacala said, “But it won’t change if we don’t try to change it. And I think righting the ship means looking at the public-private partner hospitals.” “Can you tell me what it costs to operate the hospital system now, as compared to before privatization?” Rep. Kenny Havard (R- St. Francisville) asked Reynolds. “Before, it was $600 million a year. Now, it’s about $1.1 billion a year,” Reynolds answered. “So it’s gone up,” Havard said. “We were told it would save money if we privatized, but the cost has doubled. And that is the exact amount of the deficit. We crushed other hospitals, and it still didn’t save us any money.” Chairman Henry has a question for Reynolds, too. “For the public-private partnerships, the private side returns a profit. Do we know how much?” “No, sir,” Reynolds answered. Meanwhile, Democrats had questions about the exponential effects of having the partnerships dissolve. “Don’t we get funds from providers to use for our federal match?” asked Rep. Harvey LeBas (D-Ville Platte). “Yes, sir. It goes into the Medicaid Trust Fund. It’s between $160 and $180 million dollars each year,” Reynolds responded. “Won’t this mean a major reduction in fees and self-generated revenue, then?” LeBas continued. “Yes, sir,” Reynolds answered. “These cuts are merely the first step, but it will expand, and expand, and expand, and further cuts will be needed – potentially $700 million before the next fiscal year is over.” “What will happen to patients?” Rep. Denise Marcelle (D-Baton Rouge) wondered. “Where will they go to get care?” “Access to care will decline, and there will be a ripple effect,” Reynolds replied. “Other hospitals will be flooded with Medicaid patients going to their emergency rooms. Privately insured patients will have longer wait times there and at doctors’ offices. And without access, some people could die.” “The domino effect is that some people could die?” Rep. Malinda White asked, for confirmation. “Yes, ma’am,” Reynolds answered. “We’re just telling people we want them to die, because they won’t have a hospital to go to?” White asked again, outraged. “People essentially will die?” That was too much for Rep. Scott Simon (R- Abita Springs). “Mr. Reynolds, what are your credentials? What is your area of expertise?” Simon asked. “Accounting,” the undersecretary answered. “And what is your medical background?” Simon inquired, archly. “None,” Reynolds admitted, “except 28 years with the Department of Health.” “But you know when people are going to live and die?” Simon demanded. “Just stick with your area of expertise from now on!” Then House Republican Caucus chairman Lance Harris proposed an amendment that – on the surface – seemed to contradict the plan to let the public-private partner hospital system die. Instead of fully funding TOPS, as the House Appropriations Committee had previously chosen, the Harris amendment would fund TOPS at 80%; restore nearly $26 million to higher education, and divvy up another $32.5 million to each of the partner hospitals except Baton Rouge and Monroe – which get nothing. “This is a good faith effort – seed money for the hospitals, if you will,” Harris said. “It gives them – what? An extra day of operations?” Rep. Sam Jones (D-Franklin) asked, sarcastically. Jones wasn’t far off the mark. You see, Appropriations Committee members had been told by the administration and LDH that even though some of the hospitals had already served notice, they could not cease their operations instantaneously on July 1. Some state money would need to be available while they wound down and shut down, which could run 60-90 days into the new fiscal year. “Seed money”, Harris called it, but what Louisiana will ultimately be planting are caskets, holding the remains of citizens unable to access life-saving health care.