Acadiana Business

Lafayette General inks UMC deal

by Leslie Turk

Lafayette General announced Tuesday that it has signed binding docs inking the takeover of UMC, a deal widely touted as a way to stave off mass personnel cuts at the public hospital and ensure continuity of services. Official management rights will be transferred to LGMC June 24.

Lafayette General announced Tuesday that it has signed binding docs inking the takeover of UMC, a deal widely touted as a way to stave off mass personnel cuts at the public hospital and ensure continuity of services. LGMC made the announcement in a press release Tuesday, the same day The Advertiser published a critical analysis of the Jindal-backed privatization effort.

Mike Hasten of the Gannett Capital Bureau - Gannett owns The Daily Advertiser - believes the numbers don't add up on the privatization of nine of the LSU-run hospitals:

The Jindal administration set aside $626 million that the state was willing to spend to sweeten the deals with the "partners."

The first three Baton Rouge, New Orleans and Lafayette - ate up 94 percent of that funding, leaving the hospital deals in Shreveport, Monroe, Alexandria, Houma and Lake Charles little money to play with.

Kristi Nichols, commissioner of administration, says she will ask the Legislature to sweeten the pot for the remaining partnerships. That increases the costs.

Laying off thousands of hospital employees ended up costing more than it saved because the state has to pay retirement and other benefits.

Again, the Legislature will be asked to cover the gap. ...

Nichols announced last week that the state would have "$100 million savings" with completion of the partnerships.

Considering all the costs paid to secure partners and lay off workers - more than seven times the "savings" - and the strife among hospital employees and the communities they serve, claiming to save only $100 million seems a shallow victory.

If it weren't for the anticipated $134 million in lease payments, it would have been a net loss.

Read his analysis here.

Marsha Shuler's piece in the The Advocate Tuesday also noted that the total operating costs during the new fiscal year will exceed the current budget for the nine hospitals.

The total operating expense associated with the privatization of nine LSU hospitals will hit $1 billion during the new fiscal year, Commissioner of Administration Kristy Nichols said Thursday.

That's more than is in the current year's budget - $955 million - for the state to operate the charity hospitals.

And more than the $626 million Gov. Bobby Jindal proposed for private companies to operate the public hospitals in the fiscal year that begins July 1.

Read the full story here.

Lafayette General's press release noted that all parties signed binding documents for the lease transaction last week.

The arrangement calls for Lafayette General Health (the health system that manages LGMC, Lafayette General Surgical Hospital, St. Martin Hospital and Abrom-Kaplan Memorial Hospital) to take over management of UMC and its residents and clinics. The agreement, in partnership with LSU Health, places medical residents at LGMC and UMC.

"This is an exciting next step for the public-private partnerships," DHH Interim Secretary Kathy H. Kliebert said in a press release. "This agreement will preserve community-based care for many, as well as maintain medical education. I am proud to see this agreement come to fruition."

Lafayette General said its management has been working with staff at UMC over the last several weeks and that meetings have been conducted regularly to provide information to staff and extend job offers. Lafayette General will hold three community forums in which it will provide detailed information and allow the public to ask questions. Those forums will be held at the Clifton Chenier Center auditorium (220 W. Willow, Lafayette) on Wednesday, June 19, at 6 p.m., and at UMC Voorhies Auditorium on Friday, June 21, at 4 p.m. and 6 p.m.

UMC will have the same policies for charity care and free care as it always has, according to the announcement.

Inpatient services, emergency room services and outpatient physician clinic services will remain open, and the plan is to expand the clinics and improve the hospital's efficiency in order to help more Acadiana residents access medical care.

The final phase of Lafayette General's takeover begins on June 24, 2013, when official management rights are transferred to Lafayette General Health.