Despite privatization, many safety net hospitals in Louisiana may close

Facing stark budget deficits, Louisiana is preparing for deep cuts in its healthcare budget, and the state's safety net hospitals could suffer as a result.

Gov. John Bel Edwards said that many of the state's nine publicly-funded hospitals could wind up shutting their doors, the New Orleans Times-Picayune reported. The state has a $750 million budget deficit. 

The state moved to privatize its public hospital system under Edwards' predecessor, Republican Gov. Bobby Jindal, although public coffers still contribute some $780 million a year toward their funding. The move was widely criticized, but Jindal said it was a way to ensure the hospitals could continue operating while becoming more efficient.

"In fact, right now, we estimate we have the money to keep two hospitals open. And we're going to prioritize the hospitals that are important for private medical education ... in Shreveport and New Orleans," Edwards, a Democrat, told a group of healthcare advocates, according to the article. "It's not good policy to close charity hospitals. It's a budget reality. It doesn't help us get to a better place in terms of taking care of the state of Louisiana and meeting the health care needs of our people. But it's a fact of life."

Despite the privatization and subsequent claims that it saved the state money, those hospitals continued to operate at a deficit, confirming a rather blunt assessment made by Louisiana's Treasurer. Last year, their private operators collectively requested $142 million in additional funding in order to keep the hospitals afloat.

Edwards expanded Medicaid eligibility for Louisiana almost immediately after he became governor earlier this year. However, it is unknown whether the influx of additional Medicare funds will have an impact on the state's safety net hospitals in the long run.

To learn more:
- read the Times-Picayune article