Can afford only two of nine contracts to run state hospitals

IN FEBRUARY, NEW LOUISIANA GOV. JOHN BEL EDWARDS DELIVERED AN UNPRECEDENTED 12-MINUTE SPEECH on prime-time TV and said the state’s budget crisis meant the healthcare system was “on the verge of imploding” and faced “catastrophic cuts.”

“The healthcare services that are in jeopardy literally mean the difference between life and death,” the Democrat said. “Funding for vital services like hospice care and end-stage kidney dialysis would be impacted.”

Lois Simpson, executive director of the Advocacy Center of Louisiana, said she has had clients call and say their 50 hours a week of home healthcare has been cut to 20. She can help appeal some decisions, but she said there are many more who don’t ask for help.

“They’ll have no recourse but to get services at an institution, which a lot of people don’t want and which is more expensive for the system,” she said. Mental health services in the state, which were “already abysmal,” will also see cuts. That is likely to lead to more people out on the streets or serving time behind bars when they should be getting treatment, she said.

“Policywise, it just doesn’t make any sense,” she said.

In 2012, Louisiana Gov. Bobby Jindal, a Republican, privatized the state’s public charity-care hospitals.

Recently, the state Department of Health and Hospitals said it would be able to afford only two of the nine contracts this year, said Jan Moller, director of the Louisiana Budget Project, a not-for-profit that monitors state policy.

Louisiana has been in a budget crisis since about 2008. Jindal, like Kansas Gov. Sam Brownback, cut taxes relentlessly and saw state revenue plummet. With the addition of extremely low oil prices dragging the economy down further, the state faces a $750 million shortfall for the fiscal year that begins in July, Moller said.

Edwards reversed Jindal’s stance and accepted the expansion of Medicaid in Louisiana immediately after taking office in January. That is expected to allow coverage for an additional 400,000 residents, but whether there will be enough providers remains to be seen, Moller said.

“We just don’t know yet because it’s early in the game,” he said.

Michael Cannon, director of health policy studies at the libertarian Cato Institute, said the states’ struggles show the inherent flaws in government-provided healthcare more than budget missteps.

Politicians “love to promise benefits, but they hate to deliver them,” he said. And he doesn’t see Medicaid expansion as a solution. He says the federal dollars just allow states to leave a budget unbalanced and prompt more unfulfilled promises.

To fix problems with access, he suggested loosening state licensing requirements and allowing caps on malpractice damages as some alternative ways to reduce costs and extend coverage.

Jesse Cross-Call of the Center on Budget and Policy Priorities says taxes on Medicaid managed care and increasing enrollment in those plans boosts revenue.

“If you get people coverage, the pressure on state budgets decreases because the state has to spend less money,” he said.

Clients will “have no recourse but to get services at an institution, which a lot of people don’t want and which is more expensive for the system.” LOIS SIMPSON