News Release

FOR IMMEDIATE RELEASE

DECEMBER 16, 2005

HOLLIER SEEKS ASSURANCE OF BRIDGE FUNDING FOR LSUHSC ACCREDITATION

BATON ROUGE – In testimony before the Joint Legislative Committee on the Budget today, Dr. Larry Hollier, Acting Chancellor of LSU Health Sciences Center in New Orleans, and Dean of the LSUHSC School of Medicine, reported that after an initial budget shortfall of $150 million due to the consequences of Hurricanes Katrina and Rita, a net deficit of nearly $90 million remains even after taking the most stringent measures to reduce it.

“We have taken out $60 million in expenditures, and it is not possible to reduce more,” Hollier told the Committee. “This is a crisis because the residents and interns and faculty are the workforce that provides care to the uninsured and this state cannot afford to lose it.”

Personnel actions have been taken in accordance with the Force Majeure declaration of the LSU Board of Supervisors. About 19% of the faculty, or 277, are among the 1,783 employees who have either been furloughed, terminated, or retired. The School of Medicine was most affected, losing 185 faculty, with 71 faculty from the School of Dentistry, 10 faculty from the School of Nursing, 9 faculty from the School of Allied Health Professions, and 2 faculty from the School of Public Health.

“One of the conditions of accreditation of our residency training programs is financial viability,” said Hollier. “We need immediate assurance of interim bridge funding to get us through the remainder of this fiscal year, and we have asked the state for an emergent allocation of $90 million to continue our educational programs that train almost three quarters of the state’s health professions workforce.”

Seven of the Health Sciences Center’s teaching hospitals closed, resulting in the loss of $70 million from graduate medical education, alone. Additionally, revenue streams for clinical care provided by faculty in the schools of medicine, dentistry, allied health professions, and nursing were lost. The Health Sciences Center expends about $10 million per month to pay the faculty and residents who care for patients in Southeast Louisiana, including the medically indigent.

Hollier’s turnaround effort is multi-faceted. To re-establish the revenue stream for the care provided by residents and faculty in teaching hospitals, LSU Health Sciences Center in New Orleans is applying for a waiver from the Centers for Medicare and Medicaid Services to reassign residents to new teaching hospitals with approval for reimbursement. The current contracts are with closed hospitals, and it typically takes some time to have new hospitals approved as teaching hospitals and initiate contracts. The intent is to have reimbursement follow the residents and faculty.

At the same time, Hollier is working with the LSU System’s Health Care Services Division to develop an interim Level I Trauma Center at Elmwood Hospital as well as an acute care hospital at St. Charles General Hospital. The possibility of repairing University Hospital in New Orleans for interim use until a new university hospital can be built was also raised.

As the primary source of Louisiana’s physicians, dentists, nurses, and allied health professionals, LSUHSC educates not just those who provide care in the public hospital system, but those in private practice as well, a fact brought out in the hearing.

“This is solvable for the long term,” said Hollier. “I just need help for the short term.”

Commissioner of Administration Jerry Luke LeBlanc told the Committee that the Administration is going to continue medical education in this state and is putting strategies together for a patchwork of funding to keep Health Sciences Center operations up and running and to position it for recovery.

(Contact: Leslie Capo, Temporary Office (225) 763-2808; Temporary Cell (504) 654-8592; lcapo@lsuhsc.edu)