Jindal Eyes No-Debt Option for New Orleans Hospital

DALLAS — Louisiana Gov. Bobby Jindal Monday asked for consideration of an alternative, no-debt financial plan for a proposed $1.2 billion state hospital in New Orleans.

Jindal had been cool to the changes proposed late last week by a trio of top elected officials, but agreed Monday that the new plan should be looked at by the board set up to finance and build the University Medical Center that would replace storm-damaged Old Charity Hospital.

The plan proposed last week by U.S. Sen. David Vitter, state Treasurer John Kennedy, and House Speaker Jim Tucker would eliminate the need to issue $400 million of high-interest, low-rated debt to build the proposed 424-bed academic facility.

Jindal issued the letter to directors of the University Medical Center Management Corp. seeking the review of the plan after meeting in Baton Rouge.

Participants included Vitter, Kennedy, Tucker, New Orleans Mayor Mitch Landrieu, Health Secretary Bruce Greenstein, and four hospital board members, including chairman Bobby Yarborough.

The meeting did not include representatives from Louisiana State University or Tulane University, which will train physicians at the new hospital.

Jindal discounted concerns by LSU officials that a hospital with fewer than 400 beds would be too small to provide specialized medical training.

“There has been a sense that LSU has been aggressively pushing its vision,” the Republican governor said. “The board shouldn’t be limited by anything LSU has done. Their job is not just to kick the tires, but to be an independent body.”

He said the analysis should not delay construction of the facility, which is set to open in 2015.

Yarborough said the University Medical Center’s board will probably seek another financial analysis of the facility by Kaufman Hall & Associates, which recently reported to the UMC board, and Verite Healthcare Consulting, which last year performed a similar analysis for the Jindal administration.

Yarborough said analysis of the business plans should focus on how many hospital beds will be needed in the New Orleans market, financing for the project, and potential partnerships between the medical schools and existing area hospitals.

He said the review should be completed by September, when it would be presented to the Joint Legislative Committee on the Budget. Committee members said they wanted a detailed analysis of the financial plan before deciding whether to go ahead with the project.

Vitter, Tucker, and Kennedy said in a joint statement that the meeting was “extremely productive.”

“This [analysis] is meant to empower the board to do its job independently and not rubber-stamp any LSU plan,” they said.

The plan proposed by the three officials calls for construction of a 250-bed facility on the site of the proposed 424-bed UMC.

To supplement the new, smaller hospital, the state would acquire Tulane Medical Center for $80 million. That would provide 235 beds near the proposed UMC site, they said, and another 119 beds in nearby Jefferson Parish.

The plan as first proposed last week said the new facility could be built within the existing shell of Old Charity, but Vitter said Monday that the participants at the meeting agreed that new construction would be required.

The House Appropriations Committee on Monday adopted a resolution that would require the full Legislature to approve debt for the hospital project.

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Healthcare industry Louisiana
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