Dive Brief:
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With Louisiana in the midst of a billion-dollar budget crisis, Lafayette General Health (LGH) is threatening to close 116-bed University Hospital & Clinics in Lafayette, LA (UHC), or hand it back to Louisiana State University (LSU), unless the state adequately funds the facility.
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LGH served a letter to Gov. John Bel Edwards and the Board of Supervisors of LSU to terminate the system’s cooperative endeavor agreement with the university and the state on July 1 because of a lack of funding for UHC.
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The letter comes after Edwards presented a budget in January that would cut Louisiana Department of Health funding by $656 million and lead to losing about $1.6 billion in federal matching grants. The budget proposal includes cuts to Medicaid and safety-net hospital funding.
Dive Insight:
Louisiana faces a budget crisis with a Democratic governor and Republican-led legislature that haven’t reached a budget and tax agreement to dig the state out of its fiscal hole. One casualty of this budget crisis might be a safety-net hospital that cares for some of the area's most vulnerable patients.
LGH has operated UHC since 2013. Before then, the university ran the state charity hospitals, including Lafayette at UHC. In 2013, Louisiana asked LGH to take over operations of UHC. The state, LSU and LGH entered into an agreement, according to LGH.
“It is unfortunate that the budget impasse the state finds itself in could lead to devastating, unrecoverable instability for thousands of employees, physicians, learners and patients who rely on the critical healthcare services UHC provides,” LGH President David Callecod said in a statement.
UHC saw more than 54,000 unique patients in 2017 and conducted more than 149,000 clinic visits, a 106% increase compared to 2013, LGH said.
“While this process unfolds, UHC and LGH will continue to provide care for patients who count on us for critical, life-saving healthcare services. We will continue to care for the most needy and provide training for the future healthcare providers in Louisiana. We hope the state will see the benefit our partnership provides and appropriate the necessary funding to support UHC’s continuing operations,” Callecod said.
The issues in Louisiana highlight the pressures facing states, at least in part because of growing Medicaid costs.
The Medicaid and CHIP Payment and Access Commission estimated that nearly 16% of total state-funded budget costs in fiscal year 2015 across the U.S. went to Medicaid — and that number is rising. The Kaiser Family Foundation said Louisiana spent more than $2 billion in general state fund expenditures on Medicaid in fiscal year 2016.
The governor is pushing for a special session of the Louisiana legislature to resolve the funding issues, but whether it can fix the problem remains to be seen. If not, the state might lose a 116-bed hospital and a vulnerable patient population may lose a place to get care.