Hospitals could face flood of poor patients following LSU cuts

Mid-year funding cuts for the Louisiana State University hospital system could put financial duress on many other hospitals in the state, reported The Advocate.

A report issued by the Moody's Investors Service concludes that the $29 million mid-year reduction to the LSU hospitals will force more Medicaid patients to seek care at private institutions. The cuts include bed reductions, layoffs and reductions to some medical services.

The state's providers are paid at a Medicaid rate that it is a net loss to hospitals, which could increase the financial duress of many institutions, noted the article.

"Hence, it will have a negative impact on non-governmental facilities hospitals' profitability and debt service coverage," the Moody's report stated.

Moody's reported nine Louisiana hospitals would be at financial risk, with most of the institutions in the Baton Rouge or New Orleans area.

But policymakers disputed that contention. "It doesn't look like they have done a lot of their homework," state Department of Health and Hospitals Secretary Bruce Greenstein told The Advocate.

For more information:
- read the Advocate article
- here's the Moody's report (registration required)