Health Care

Lafayette General chief ‘pleased’ by state budget news

by Walter Pierce

Lafayette General Health CEO David Callecod at a February press conference discussing the possible closure of University Hospital & Clinics
Photo by Wynce Nolley

David Callecod, CEO of the six-hospital Lafayette General Health System, got good news today — with a caveat, but good news nonetheless — when Gov. John Bel Edwards released his proposed 2016-17 budget. Edwards’ budget maintains, with a 3 percent cut in the state’s funding share, the public-private partnerships at LSU hospitals in Shreveport, Monroe, New Orleans, Baton Rouge and at Lafayette’s University Hospital & Clinics, the former University Medical Center.

UHC, Lafayette’s charity hospital, was taken over by LGHS, parent company of Lafayette General Medical Center, in 2012 in a deal with the administration of former Gov. Bobby Jindal. Edwards said he marked the five LSU hospitals for continued funding because they train the largest numbers of medical students. But the state’s budget crisis had lawmakers during February’s special session discussing eliminating funding for all public-private charity hospitals except in New Orleans and Shreveport, which serve as LSU medical schools. That prospect drew Callecod to Baton Rouge in late February to warn legislators that UHC would close if the state couldn’t meet its financial obligation.

University Hospital & Clinics
Google Earth

“We’re certainly pleased that we moved from zero funding to the proposed budget,” Callecod told ABiz Tuesday, soon after Edwards’ budget announcement. “However, the proposed budget, while being a 3 percent reduction in the budget, actually assumes a certain level of Medicaid enrollment that we will achieve as a state. And so there’s quite a bit of discussion that needs to be had with the administration in regard to the levels of enrollment truly achievable in a short time frame for that revenue to result as direct revenue to the partnerships. But at this point we’re certainly pleased that we’ve moved from not being funded to now we’re having this new discussion about the proper funding levels.”

Edwards made Medicaid expansion through the Affordable Care Act a plank in his campaign for governor last fall and signed an executive order initiating it soon after his inauguration in January. The plan hit a pothole when lawmakers balked at hiring some 250 new state employees to handle enrollment. The administration announced this week that it plans to rework how enrollment of new Medicaid patients will be handled, instead beefing up an existing contract with the University of New Orleans to augment the state health department’s staff. Estimates on potential new Medicaid enrollees — residents who before passage of the Affordable Care Act earned too much to qualify for Medicaid but earned too little to afford private insurance — range from 300,000 to 350,000 people, according to Callecod.

“The budget is very dependent upon Medicaid expansion and those additional dollars flowing through the managed care companies for previously uninsured patients,” he tells ABiz.

The governor’s budget meanwhile would end funding for safety-net hospitals and clinics in Alexandria, Bogalusa, Houma and Lake Charles, threatening them with closure.

Callecod says a lot of discussion still needs to be undertaken as the state and private health care companies like LGHS move forward, but he’s encouraged by Tuesday’s announcement.

“We have been and continue to be very supportive of Medicaid expansion. It’s the right thing to do for these folks who have not been able to afford health care,” he tells ABiz. “And we also continue to be very pleased with improvements we’ve made at UHC and also the clinics that in many cases will be the avenue in which these newly insured folks will be able to access the health care system.”