Health Care

Commentary: Kennedy Lays Out Compelling Case Against State’s Plan For New Charity Hospital

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Criticizes plan as oversized and financially unsustainable, offers more responsible alternative

State Treasurer John Kennedy gave an illuminating counterargument against the proposed new “Big Charity” hospital in New Orleans this Tuesday at Grace Church in Mid-City. Kennedy criticized the unfeasible size and cost of the proposal for the new University Medical Center, or Big Charity, while supporting alternatives which would cost the state and taxpayers less.

Since Hurricane Katrina devastated the region in 2005, Charity Hospital has remained dormant, shutting New Orleans residents out of urgent health care. While those who need care the most have waited, $800 million state and federal funds have been allocated towards the construction of a new facility.

Unfortunately, the state government developed a grandiose, impractical plan for this facility. The LSU Health Sciences Center (HSC), which owned and operated the old Charity, has pushed for a $1.2 billion, 424-bed facility to be built on the site of existing residences and businesses, creating a firestorm of controversy over eminent domain and protecting historic properties.

Those concerns aside, this plan’s chief flaw is that it requires an additional $400 million in funding which the state does not have. There is no concrete or responsible idea for where this gap money would come from, other that it would come from the sale of bonds. It would then require an annual subsidy of $100 million to run- more money the state will be hard pressed to come up with. In addition, it oversaturates the market with a disproportionate number of beds, meaning tax money would be going towards empty rooms.

The state hired two respected health care consultant firms, Kaufman Hall and Verite, to assess the Big Charity proposal. Both firms came to the same conclusion: the $1.2 billion Big Charity project is unequivocally unsustainable and needlessly large. Nonetheless, those pushing for this plan in Baton Rouge continue to do so without taking into account alternatives which would be more efficient and avoid wasteful spending.

Instead, Kennedy, along with Sen. David Vitter and House Speaker Jim Tucker, have put forth an alternative plan. Under their proposal, the HSC would buy the current Tulane-HCA Hospital downtown and build a 250-bed hospital nearby. This would be $400 million cheaper, as well as allow for quicker construction so that residents can get their care sooner. It would also have 42 percent more beds by restoring the Tulane campus, but would not add as many newer unnecessary beds.

The need to replace the shuttered Charity Hospital is immediate and should not be impeded by unrealistic pet projects and agendas. Treasurer Kennedy succeeded in demonstrating the pitfalls of a unilateral policy which is not only costing too much money, but wasting too much time that the people of New Orleans do not have. A plan which reflects the needs and wants of the people needs to be heard, and by all signs Treasurer Kennedy has the best interest of the public in mind with his.

Jamison Beuerman is a contributing writer and policy analyst at the Pelican Institute for Public Policy. He can be contacted via email at jbeuerman@pelicaninstitute.org or followed on twitter @jbeuerman.

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