Lacking the discretionary funding to balance the upcoming state's budget without excessive health care and higher education budget pain, the state should move more items out of the hands-off pot. At least that's what John Matessino, president and CEO of the Louisiana Hospital Association, thinks.
"The charity or LSU hospital system, and what we're going to do with that, is in question," Matessino said after the meeting. "One of the big problems of that system is obviously paying for it. Hospitals are not cheap to run."
The burden of caring for the uninsured does not fall on the charity system, Matessino explained. Private hospitals statewide provided $186 million worth of care for the uninsured during a recent fiscal year. But the state reimburses the charity hospitals at a "significantly higher rate than the private hospitals as a way to help subsidize the charity hospitals."
Currently, all but $7.7 billion of the state's budget is dedicated. Of that $2.6 billion is nondiscretionary, meaning $1.6 billion — the deficit sum — has to be taken from there.
However, phasing out or shuttering any of the charity hospitals likely would go against the grain of many who hold the legacy, dating back to the days of Huey P. Long.
"One of the issues when you're dealing with trying to get rid of a hospital is 'Who wants to be the local legislator to support closure when there are jobs involved?'" he said. "It's been ingrained going back to Huey Long that the uninsured in this state always had the charity hospitals as a backstop. It's very difficult to break some of those cultural behaviors that have literally gone on for generations."
According to Matessino, the health care sector represents almost 15 percent of the total payroll for the state, or about $8.33 billion. Yet hospitals alone employ 99,351 with a payroll of $4.4 billion, which amounts to 55 percent of the payroll within the health care sector.
Altogether, hospitals average about $469 million annually in construction, and create more than 8,042 new jobs yearly in businesses other than health care.
Economic activity supported by hospital expenditures leads to $487 million in state tax collections and $325 million in local tax collections.
No matter how you slice it, it's problematic, Matessino said.
"Regardless of reapportionment, two weeks after that's finished, they all have to come back to deal with the budget," Matessino said. "That's going to make for some interesting politics. Then there's the elections in the fall."
