DALLAS — The board overseeing the construction of a proposed $1.2 billion state hospital in New Orleans decided Wednesday to take another look at the proposed financing.
The University Medical Center Management Corp. selected Verite Healthcare Consulting LLC to develop a new plan that does not assume the facility will have 424 beds as now proposed.
The consultants have been tasked to study the size of the New Orleans medical market, and determine how best to meet the needs of patients and Louisiana’s needs for an academic hospital to train doctors.
When Verite completes the new financial plan, Kaufman Hall & Associates will analyze it. Kaufman will also serve as strategic planning consultant for the board.
Both firms have analyzed the costs of building and operating the hospital in New Orleans’ Mid-City area. However, those studies were based on plans by the state and Louisiana State University’s medical school for a complex large enough to provide specialized academic training.
UMC chairman Bobby Yarborough has pledged to present a revised comprehensive business plan to the Legislature’s Joint Budget Committee on Sept. 16. Committee chairman Rep. Jim Fannin, D-Jonesboro, said in May that he would not allow construction to begin on the hospital until lawmakers could review a new plan.
The current financial plan includes $407 million of hospital revenue bonds in addition to $800 million of federal dollars that state has received as compensation for damages to Old Charity Hospital from Hurricane Katrina in 2005.
Yarborough said the new studies will not delay construction on the hospital, which is scheduled to open in 2015.
Jerry Jones, director of the state facilities office, told the UMC trustees Wednesday that construction of the originally envisioned 424-bed facility could be financed without the proposed bonds.
Jones said the state could use the money from the Federal Emergency Management Agency to built the patient towers and a diagnostic clinic, and rely on public-private partnerships to provide the $300 million to $400 million needed to construct one or more parking garages, medical office buildings, and a central utility plant.
Another debt-free option would be to build some buildings now but not equip them until the hospital begins to generate revenue from patients, Jones said..
Gov. Bobby Jindal asked for further scrutiny of the proposal to build a large academic medical center that would treat indigent patients and train medical students. The Republican governor did so after U.S. Sen. David Vitter, state Treasurer John Kennedy, and House Speaker Jim Tucker offered a cheaper alternative plan last month.
The UMC board should explore “all options to maximize the benefits and outcomes of the project in order to ensure the creation of a first-rate medical center,” Jindal wrote in a letter dated June 13.
“The plan you create should consider options even beyond those in existing studies,” the letter said.
