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Friday, June 3, 2011

Hospital drama

Posted By on Fri, Jun 3, 2011 at 10:53 PM

It’s been a rough spring for LSU. Its baseball team failed to draw a berth in the NCAA tournament. The University of New Orleans is breaking away from the LSU System to join the more hospitable University of Louisiana System. And now opponents of the proposed LSU teaching hospital in New Orleans are crowing about a consultant’s report on the hospital’s size and cost.

The baseball team’s woes will soon be forgotten. There’s always next year.

UNO’s move could actually be good for LSU. “Losing” UNO will force the mullahs who run the LSU System to focus more on the main campus.

The hospital drama’s ending is not so easy to predict, but that’s where everyone has the most to lose. The institution’s stakeholders extend far beyond LSU. They include insured as well as uninsured patients across south Louisiana, doctors and others in the health-care profession, and the entire metro New Orleans area.

The planned University Medical Center (UMC) will do much more than replace the shuttered Charity Hospital, which flooded during Katrina. If it realizes its potential, UMC will be the biggest economic development engine the city has ever known — which is why some folks (read: certain private hospitals) don’t want to see it built to its original scale.

The key to understanding that dynamic is the fact that UMC will be much, much more than a replacement for Big Charity. In fact, any reference to the new hospital as a “replacement” for Charity does everyone a disservice. A true teaching hospital, which is what UMC aspires to be, will not only pick up Charity’s uninsured patient load but also attract private patients.

Ah, there’s the rub.

While some question whether a public institution ought to compete with counterparts in the private sector, the issue is not as simple as that. Consider, for example, the famed M.D. Anderson Cancer Center in Houston. Everyone knows of M.D. Anderson’s outstanding reputation, but not everyone knows that M.D. Anderson is a public hospital. In fact, it is officially The University of Texas MD Anderson Cancer Center. Yep, it’s UT’s teaching hospital. And as for whether it competes with private hospitals, even a casual glance at Houston’s medical corridor will provide ample evidence that the operative word is “synergy,” not competition.

Unfortunately for UMC, its battles include more than the public-private debate. Preservationists are furious about the way LSU demolished old houses without trying harder to relocate those with architectural significance. They also bemoan, rightfully, the hospital’s “suburban” look — although Mayor Mitch Landrieu has leveraged concessions on that front.

UMC’s biggest problem, right now and for the foreseeable future, is money. Cost-conscious legislators question the need for UMC’s planned 424 beds (and its $1.2 billion price tag, of which $400 million must be borrowed), and the consultant’s report projects state subsidies of up to $100 million by 2020.

The bed-count issue relates back to competition, and that fight will not end amicably. The price tag gives UMC’s opponents a potent weapon. UMC supporters will have to dig deep to address that issue.

As for the $100 million annual subsidy — which is a top-end estimate for a decade hence — let’s keep things in perspective. While $100 million is a lot of money, it’s a fraction of the state’s operating budget today, and it will be a smaller fraction by 2020. Moreover, when you consider UMC’s potential economic impact on the city and the state, $100 million a decade from now will likely be far less than the institution generates.

Getting from here to there will not be easy, however. Nothing worthwhile ever is.

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