Louisiana's steadily worsening fiscal crisis looms as a doomsday scenario for all areas of state government, none more so than public health care. We are unique among the 50 states for our statewide Charity Hospital system, an expensive but iconic health care safety net for Louisiana's underprivileged. In all other states, public hospitals are funded locally or regionally. Ironically, the passage of President Barack Obama's health care reform package, which was supported wholeheartedly by Democrats as a way to bring affordable health care to the poor, will spell the end of Louisiana's Charity Hospital system. The president's plan significantly reduces the federal "disproportionate share" Medicaid program, which for years kept Charity hospitals afloat. Without those federal dollars, the Charity system cannot stand.
And that's just part of Louisiana's health care crisis.
Local, publicly supported community hospitals like East Jefferson and West Jefferson general hospitals also face financial ruin because of the state's fiscal problems — and because of uncertainties brought on by federal health care reform. The only certainty at this point is that Louisiana's publicly supported health care system must change to meet the demands of the public (and federal law) as well as the constraints of fiscal reality. As lawmakers struggle to patch together a budget, they should focus more on opportunities for improving the state's return on its health care investment.
Fortunately, some already are focused on the opportunities. Last year, lawmakers adopted a novel health care financing plan proposed by state Sen. David Heitmeier, D-Algiers. The Heitmeier plan allows the state to leverage local governments' existing health care expenditures into millions of new federal health care dollars. Under Heitmeier's plan, the state can accept "intergovernmental transfers" from local governments, which already are spending some money on health care, and use those dollars as part of the state's "match" for federal health care dollars. The state then can return the local dollars — plus part of the federal match — to local governments to enhance local health care services. For its efforts, the state gets to keep some of the federal match for its own hospitals.
The Heitmeier plan has the potential to generate several hundred million additional dollars a year for state and community hospitals, but that still won't cover the state's shortfall. Nationally, health care costs are increasing at all levels. Businesses and individuals are seeing health insurance premiums rise to record levels, while government spending on health care in 2009 grew by almost 9 percent. Last year, health care spending across the United States accounted for more than 17 percent of the gross national product. By 2020, it is estimated that one in every five dollars spent in the U.S. will go to health care. In Louisiana, 31 percent of the total state budget goes toward health care, and 27 percent of our residents — more than 1.2 million people — depend on Medicaid for their health care services, an all-time high.
So what are Louisiana's opportunities, besides finding new and better ways to leverage federal dollars?
The immediate challenge — and opportunity — is to reinvent how public health care is delivered in Louisiana. If we have no choice but to get the state out of the hospital business, the aim should be to establish first-class local, regional and community hospitals that deliver a combination of basic and specialized care. Teaching hospitals also must play a major role, starting locally with the new LSU/VA complex.
Gov. Bobby Jindal wants to use some one-time funds to give the state time to retool health care programs to better deal with the funding issues. He also proposes significant programmatic changes such as privatizing certain state services, developing more community-based services and promoting public-private partnerships in health care delivery services. An example of the latter is the state's recent partnership with Our Lady of the Lake Hospital in Baton Rouge to provide health care for citizens who currently rely on the state-run Earl K. Long Medical Center. Our Lady of the Lake also will serve as a teaching facility for LSU health care students.
Overall, Louisiana is experiencing a "code blue" in public health care. But this crisis also gives us the opportunity to create a better, more efficient health care delivery system that not only fits the state's budget, but also benefits the state's citizens.