SPONSORED: Public-private hospital partnerships and their utmost importance to our state

Funding for Louisiana’s public-private hospital partnerships is in question, and it could have a dramatic effect on healthcare in Louisiana. So, why are public-private hospital partnerships important to the state?  

In 2013, Louisiana took an important step forward in healthcare by transitioning to a public-private hospital partnership model for its regional charity hospitals located all across the state. The transition took over a full year to complete, and the value proposition has been outstanding.  Publicly operated hospitals transitioned into receiving services via management by privately-led hospitals. This was a huge for the step forward in reducing emergency room wait times, increase in outpatient visits, and better access to specialty services. It also allowed graduate medical education to remain in those facilities and in the state of Louisiana.

In addition, the value of the over $200 million in annual lease payments made by the hospital operators allowed the state to draw down an additional $600 million dollars annually, for a total contribution of over $1.85 billion dollars, since 2013, toward the cost of providing graduate medical education and safety net healthcare. For every one dollar spent on graduate medical education and safety net healthcare, less than ten cents of it comes from the state’s general fund coffers.  That’s right, the state general fund pays less than 10 percent of the cost of graduate medical education and safety net healthcare, with the balance coming from private partner lease payments and federal matching funds. It is a win-win for healthcare and higher education, as $800 million of costs for graduate medical education and healthcare do not have to come out of the state general fund.

Through 2016, the state received almost $1.4 billion from lease payments.  And we’ve seen over 18,000 jobs created in the hospital sector, since the partnership was created in 2013.  

From the availability of healthcare to positive effects on graduate medical education to generating revenue and jobs for the state, it is clear on how this partnership has been a positive move for the state.

So, what’s at risk?

If budget cuts effect the public-private partnership, there is a possibility that the partnership could dissolve which would reverse any positive traction gained in the state’s healthcare over the last five years.  Partners would no longer be obligated to make less payments and provide care, starting July 1, 2018. Without the lease payments, the state would lose the match component to draw down federal funds. Thus, the cost of graduate medical education and safety net healthcare would go from costing the state general fund ten cents on every one dollar to a full one dollar – a 900 percent increase.

Medicaid and uninsured patients would see an increase in waiting periods to receive primary care; decrease access to efficient testing and procedures; and may have to travel further, even out of state, to receive specialty care.  Prior to the partnerships, some patients would have to wait close to six months for an angiogram due to lack of specialty facility availability or lack of accessibility to the facility. Going back to this type of healthcare should not be an option. Additionally, with facility closures, well over 10,000 people would be laid off.

With continuous discussions over the state’s budget deficit, it is important to remember how much revenue this partnership has generated over the last four years.  The partnership is a win for healthcare, higher education, state’s economy, and most importantly, the patients.

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