State lawmakers are impatient for a business plan for the $1.2 billion University Medical Center in New Orleans, though construction on the project will begin in June. Facilities Planning Director Jerry Jones told the Appropriations Committee today that dirt work can precede a business model and final decision on the size of the facility. Starting any later, he says, would make it harder to compete for the best subcontractors and workers with other construction projects about to get under way. Jones estimated construction inflation at $1.5 million for every month that passes if the project begins after July. While legislators expressed concern about the competitive pressure of the state hospital on private and community hospitals in the region, Jones predicted the New Orleans area will reach a bed capacity within a year of the planned opening in 2015. Chairman Jim Fannin, D-Jonesboro, expressed frustration at the inability of the UMC board to present a business plan by now. Fannin warned Jones and board Chairman Robert Yarborough not to come to the Joint Budget Committee in June to get approval to start construction without a business plan. “There’s been a lot of motion and not much action in this process,” Fannin says.
— The state employee health insurance plan administered by the Office of Group Benefits will be contracted out, not sold, Commissioner of Administration Paul Rainwater told a Senate committee looking into the matter that has stirred strong opposition among employees. “Now we’re talking about privatization and not a sale?” asked Senate Retirement Committee Chairman Butch Gautreaux, D-Morgan City, an outspoken critic of the idea. “We call it a sale of the right to a private company to run the PPO,” says Rainwater, who estimated a payment to the state of about $150 million for a contract up to five years. He compared it to the state’s contract with Blue Cross to run a larger HMO for state workers. Rainwater stressed later that the PPO’s $520 million surplus would remain in the state treasury to be used to pay employees’ plans. Critics of the privatization plan, including Gautreaux, have said companies would only be interested in getting control of that half billion dollars. Though his retirement committee does not have oversight of the Office of Group Benefits, Gautreaux says he would hold weekly hearings until he got all the facts. Outside the meeting, Rainwater, after a repeat appearance, assured it would be his last.
(John Maginnis will publish a daily update on the legislative session at 3 p.m., available to LaPolitics Weekly subscribers on the Subscribers Only page at LaPolitics.com. You can register your user name and password on the Lapolitics home page.)