The Louisiana Joint Legislative Committee on the Budget last week accepted a revised business plan for a $1.088 billion state hospital in New Orleans.
The revised plan eliminates the initial proposal to authorize $407 million of new revenue bonds to build the 424-bed University Medical Center. The facility will serve as one of the state’s 10 charity hospitals as well as the main academic hospital for Louisiana State University.
Bobby Yarborough, chairman of UMC Management Corp., assured House Budget Committee chairman Jim Fannin, D-Jonesboro, that the hospital can be built with the money the state has available and with proceeds from an existing bond authorization.
The state will finance the project with $300.7 million of proceeds from capital outlay bonds approved in 2006 and $630.7 million in federal reimbursements for damage to Old Charity.
The LSU Physicians Foundation is expected to issue up to $130 million of bonds to finance an ambulatory care clinic and a parking garage at the complex in New Orleans’ Mid-City neighborhood.
The committee’s approval on Sept. 16 gives the Office of Facility Planning and Management the go-ahead to begin construction of UMC. The hospital is projected to be operational by 2015.
State Treasurer John Kennedy told the lawmakers he was pleased the hospital can be built without new state-issued debt. However, he questioned many of the assumptions in the financial plan adopted by the UMC board Sept. 8.
Kennedy said it was unlikely the new facility could attract enough patients to fill the beds. He again urged the state to meet patient demand by buying an existing hospital nearby and building a smaller facility to serve LSU medical students.
Gov. Bobby Jindal called the budget committee’s approval “a great step forward.”
“The UMC board has a business plan that lowers the overall construction costs, reduces annual expenses to the state, calls for no state bond debt financing, and is a strong foundation to build a hospital that will move New Orleans and Louisiana to the forefront of modern medicine and medical research,” Jindal said.
