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New Report Shows Public-Private Partnership Hospitals Have $2.7 Billion State Budget BoostNew Report Shows Public-Private Partnership Hospitals Have $2.7 Billion State Budget BoostNew Report Shows Public-Private Partnership Hospitals Have $2.7 Billion Stat

Baton Rouge, La. – A new report by noted economist Dr. Loren Scott, details the nearly      $2.7 billion boost to the Louisiana budget from the state’s public-private hospitals since the state transitioned from a charity hospital system.  Dr. Scott was commissioned by the Public-Private Partnership Hospitals to look at the economic benefits of the transition, in response to proposed state budget cuts for the upcoming fiscal year. His findings were presented to the Baton Rouge Press Club on Monday.

In his report, Dr. Scott found the transition had three main financial advantages for the state.  The largest is lease payments that are being paid to the state by the private partners.  In some of the agreements between the state and the private partner, the state retained ownership of buildings and equipment that were part of the charity system.  The lease payments are new revenue for the state, and they’re also eligible for Federal Medical Assistance Percentages (FMAP), which are matching federal funds.  In 2016, the state received more than $525 million in lease payments and FMAP funds.

Another way the state gained from the transition from public to privately run healthcare was that payments that are made to physicians became eligible for an FMAP matching payment from the federal government. The total Physician FMAP payments have averaged approximately      $350 million per year.

The third monetary advantage for the state is capital expenditures made by the private partners.  Without the transition, the money for these expenditures would have come out of the treasury.  Nearly $40 million was spent on the repair of state property, more than $38 million on equipment, $36 million for property, and nearly $27 million on electronic medical records technology. This totals over $140 million over the last four years.

Dr. Scott’s report says without the nearly $2.7 billion impact, additional budget cuts would have been necessary for higher education and healthcare.  Instead, the added money created sales, earnings and jobs in the higher education and healthcare sectors.

The report also details other gains to the state including, reduced emergency room wait times, an increase in outpatient visits, the elimination of waiting lists for prescriptions and primary care, an expansion of specialty services and transitions to electronic medical records. 

The nine public-private partnership hospitals are:

  • Our Lady of the Lake Regional Medical Center – Baton Rouge
  • Lake Charles Memorial Health System– Lake Charles
  • Lafayette Health System/University Hospital and Clinics – Lafayette
  • University Medical Center – New Orleans
  • Leonard J. Chabert Medical Center-Ochsner – Houma
  • CHRISTUS St. Francis Cabrini/Rapides Regional Medical Center – Alexandria
  • University Health – Shreveport and Conway (Monroe)
  • Our Lady of the Angels Hospital – Bogalusa

For more information and a copy of Dr. Scott’s report, please contact Ed Walsh with Gremillion & Pou Integrated Marketing at 318-465-0138 or ewalsh@gpmarketinginc.com.

Click here to see a summary of findings.

Click here to read the full report.

For more information, please contact Ed Walsh with Gremillion & Pou Integrated Marketing at 318-465-0138 or ewalsh@gpmarketinginc.com.

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