LSU, Tulane OK revised New Orleans hospital plan

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LSU, Tulane OK revised New Orleans hospital plan
Aug. 28, 2009
By MELINDA DESLATTE
The Business Insider

BATON ROUGE, La. (AP) — With some outside help, officials at LSU and Tulane University have reached a compromise over governing a new $1.2 billion public teaching hospital for New Orleans, a deal that paves the way for land acquisition to resume.

The revamped governing plan won unanimous approval Thursday from the LSU Board of Supervisors and the Tulane Board of Trustees, finalizing the agreement.

"I think everybody's ready to move past this drawn-out discussion of this," said Fred Cerise, LSU vice chancellor for health affairs and medical education, after the LSU board vote.

At issue had been how much clout LSU would have on the governing board of the hospital it will help finance — and the Jindal administration suspended land purchases and expropriations for the hospital until the dispute could be resolved.

The new plan gives LSU four appointees on an 11-member board to govern the private, nonprofit corporation affiliated with LSU that will run the hospital.

Tulane University and Xavier University, which have medical students that will train at the hospital, each will get one slot on the board. Another position will rotate among three other New Orleans universities: Delgado, Dillard and Southern. The remaining four appointments won't be affiliated with the schools.

Tulane President Scott Cowen said the agreement ensures the new hospital will be governed with "the appropriate controls and safeguards, including independent oversight."

"It is now time to fund, build and operate a world-class university medical center that will be a source of pride and accomplishment while also increasing the number of health care providers for our community and state," Cowen said in a statement.

The compromise was negotiated by Gov. Bobby Jindal's office.

"It took a lot of work to get to this point, but I think it's a very important step forward," Jindal said in an interview.

Cerise said the suspension of land acquisition was a driving force behind a deal being reached, but he said the timeline of the hospital construction hadn't been disrupted. A Jindal spokesman said land acquisition would restart now that a governing deal had been reached.

The LSU-run Charity Hospital — which provided indigent care for the New Orleans area and was a main training hospital for medical students — was flooded and shuttered by Hurricane Katrina in 2005. The university opened a temporary replacement, called the Interim LSU Public Hospital, while pushing plans to build the new 424-bed teaching and research hospital.

The new governing board plan "was absolutely critical to making sure that we didn't just simply rebuild what was there before the storms," Jindal said.

A financing plan for the new hospital, projected to open by 2013, still hasn't been worked out. The state has set aside $300 million for the facility but continues to haggle with FEMA over reimbursement for the damage to Charity Hospital. The state says it is owed $492 million, while FEMA has offered $150 million.

LSU proposes to borrow the remaining $400 million by selling bonds that LSU officials said would be paid off with the hospital's income from paying patients, though some critics question whether the hospital will generate enough money to cover the bond repayment.