LSU Medical School deal: Beware toxic politics

As if toxic politics was not already an issue in this, the possible involvement in the deal of Bruce Greenstein, Louisiana’s former secretary of the Department of Health & Hospitals, has set off all alarms. Many around the state see this as unthinkable since Greenstein, appointed and highly favored by Gov. Bobby Jindal, resigned last March amid news of state and federal investigations, still underway, into his handling of certain state health-care contracts.

On July 8, as seen in cell phone pictures taken by a nearby diner, Greenstein joined BRF President Dr. John George, Board Chairman Steve Skrivanos and others for a dinner meeting at a local restaurant. Though discussion of the hospital’s “privatization” gambit is known to have been on the menu, thus far unconfirmed is the claim that Jindal directed BRF and/or med school officials to find Greenstein a job here while the investigations continue.

A sweetheart deal in the making? In my first column on this subject, I noted that the legislature just coughed up an “extra” $40 million-plus to run Shreveport’s public LSU Hospital for yet another year. I was later corrected by a Legislative source who noted that the miracle millions rather went to LSU Medical School. However, budgeting for the two by the legislature has been combined since its action in 1976. So, how will the public confirm and monitor the unmingling of that co-mingling? Will BRF be hauling in untold millions of taxpayer cash, which would never go to an actual private or not-for-profit partner?

A likely canary in this coal mine was identified by local journalist Melody Brumble in her report of the LSU Board of Supervisors’ more than doubling of workspace leases the state pays to BRF. Until this deal, BRF’s workspace lease to the med school netted it $3.8 million a year. Now, by dramatically raising the overall lease rate as it also increased its BRF space, the payment to BRF jumps to $8.6 million a year.

Over the new 30-year lease term, the state thus gives a quarter-billion taxpayer dollars – $258,000,000 plus – to BRF, much of which was not going to be spent without this deal.

Another example seems to be the disposition of the state hospital’s accounts receivable cash and its debts. When the LSU Board of Supervisors approved the state contract with BRF to take over the hospital, 50 pages of it were blank, so confusion reigns on this and many other such issues.

Nevertheless, the current language suggests BRF takes the cash owed for patient services when the hospital was public, but does not take the other side of the ledger – the LSU Hospital’s debts. If such is the case, put it this way: Taxpayers “lose” the tens of millions in receivables but keep the hospital’s accrued debts and other liabilities.

We gotta hope it’s coincidence

A truly “privatized” hospital would be related to the med school only by specific, necessary and transparent contracts. Such is not the case in this deal. Frontline participants in this transition attest that top officials of the two act as if in sworn lock-step in everything.

In fact, the two may be closer than ever given BRF’s proximity to contract renewals for top med school officials.

The Jindal Administration announced its state hospital “privatization” gambit Oct. 4, 2012. Three weeks prior, according to related state documents, med school Chancellor Dr. Robert Barish was given a “renewal of appointment,” a contract extension of unknown term, likely four years. Then on Feb. 1 of this year, Vice Chancellor Dr. Hugh Mighty received an extension of his contract to June 30, 2016. With total compensation for the two of some $1.2 million per year, these pay packages place the men at/near the top of the compensation list for all Louisiana state employees.

Which state entity negotiates and approves such contracts? The LSU Board of Supervisors. Who in this deal is a member of that board? BRF President Dr. John George. Did George lobby for these contracts or recuse himself from any involvement in them? No such public record is available. Who appointed members of the board of supervisors? Jindal. Who contributed $10,000 to the governor’s election campaigns? Dr. John George. Thanks to the work of online journalist Tom Aswell, we know that 12 of the 15 members of the board of supervisors contributed between $5,000 and $61,000 to Jindal’s campaigns, thus the “payto- play” name-tag assigned to this top drawer appointment.

Hospital management a mystery

I may have been wrong when I previously wrote that BRF would need to find and pay a hospital manager to run the “privatized” facility. In a letter dated July 11, the BRF president announced it will do the job itself under the name “Biomedical Research Foundation Hospital Holdings.” Given that BRF has never provided health-care services, much less run a hospital, the public can only hope this is temporary with an experienced hospital management company on the way. If such occurs, that contract will demand intense public scrutiny, including identification of any insiders who make it happen.

The point is that the LSU Hospital in Shreveport obviously is not actually being “privatized.” As extraordinary state money is being shuffled, given without legislative appropriation, buried in office space leases or otherwise credited to BRF, such is direct and continuing state support, not privatization.

Though the state charity hospital system long ago outlived its usefulness, as of now, this replacement system may prove no better and is likely to better serve a relatively few insiders at the expense of being accountable to taxpayers.

Elliott Stonecipher is a native and resident of Shreveport, La. A graduate of Louisiana Tech University and Louisiana State University, he is president and owner of Evets Management Services Inc. Since Hurricane Katrina in 2005, Stonecipher has committed to pro bono work on a range of local, state and national issues, including reform of governmental and political ethics, and reform of national policies governing the U. S. Census Bureau. His work has been published in The Wall Street Journal, and he has appeared on CNN and Fox News Channel.