BATON ROUGE, La. (AP) — LSU continued to shrink its hospital management footprint Monday, turning over its health facilities in four cities to private operators, including a shift in New Orleans that has caused delays in non-emergency services.
As part of Gov. Bobby Jindal's push to privatize the university-run hospitals and clinics, operations of LSU facilities in New Orleans, Lafayette, Houma and Lake Charles were leased to nonprofit corporations that run private hospitals in the regions.
The Lake Charles hospital has become an outpatient clinic, with its inpatient and emergency services shifted to a nearby private hospital.
Nearly 4,000 state employees were laid off because of the outsourcing at the facilities that care for the uninsured and that provide training sites for Louisiana's medical students. About 86 percent of workers, or more than 3,400 employees, were hired by the new hospital managers, according to information from LSU.
The largest hospital affected by the transition was the 200-bed Interim LSU Public Hospital in New Orleans.
The Louisiana Children's Medical Center, which operates Children's Hospital and Touro Infirmary in the city, is leasing the hospital and its clinics and will take over the new $1 billion, 424-bed medical training and research center set to open in New Orleans in 2015.
More than 1,900 of the 2,200 employees stayed with the hospital, and efforts were made to keep as many workers as possible, said Brian Landry, spokesman for the Louisiana Children's Medical Center.
But the staffing shake-up forced cancellation of 20 percent of the hospital's elective surgeries as some employees retired early, took blocks of back-owed vacation time or found work elsewhere.
"That created some staffing shortages," Landry said. "We're trying to hire staff as quickly as we can so we can get back to a full schedule for elective surgeries."
He said patients for other, non-urgent services may see "some spotty delays," but he said hospital officials hope to resolve the problems quickly.
"We knew that this was going to create some challenges in terms of staffing," Landry said.
Jindal administration officials have said that without privatization, the university-run public hospital system would have been forced to eliminate services, close beds and cut clinic hours.
The Republican governor turned to LSU hospital privatization after Louisiana faced a drop in its federal Medicaid financing rate, which meant the state gets fewer federal matching dollars for every state dollar it puts up. Jindal chose to levy most of the cut on the university-run hospitals, rather than on the private Medicaid providers.
"To continue meeting the needs of our people at a cost that was sustainable for taxpayers, we ambitiously sought to convert our charity hospitals to public-private partnerships that will care for our most vulnerable, improve the level of care that's offered and implement expanded services," Jindal said in a statement.
Commissioner of Administration Kristy Nichols said privatizing nine of the 10 public hospitals and their clinics will save the state an estimated $100 million in the 2013-14 budget that takes effect July 1.
The state will use $140 million in lease payments from the new hospital managers to draw down federal financing, cutting down on the state tax dollars used, Nichols said.
Other privatization deals that took effect Monday included:
—Ochsner Health System and Terrebonne General Medical Center assumed management of the LSU-run L.J. Chabert Medical Center and its outpatient clinics. LSU said of the 806 employees on staff in May, 737 took jobs under privatization.
—Lafayette General Health System took over operations of the LSU-run University Medical Center in Lafayette and its clinics. LSU said 511 of the 785 employees on staff in May received jobs with Lafayette General.
In Lake Charles, the university system's W.O. Moss Regional Medical Center was shuttered and most of its inpatient, surgery and emergency services were shifted to Lake Charles Memorial Health System, which will build a new, $4 million outpatient clinic at the Moss site.
LSU's outpatient clinics in Lake Charles are remaining open under Lake Charles Memorial management. About 225 of the 342 state employees, or 66 percent, were rehired by Lake Charles Memorial, according to the health system.
Earlier this year, Baton Rouge's LSU-run hospital was closed and most of its services transferred to a private hospital in the city. Three more public hospitals have privatization contracts signed, with those transitions set for October and January.