A study commissioned by Louisiana’s private indigent care partners shows that former Gov. Bobby Jindal’s decision to privatize the state’s health care system for the poor has resulted in savings for the state budget.
Conservative economist Loren Scott said at the Press Club of Baton Rouge’s weekly meeting today that partly privatizing the state-run charity hospitals saved Louisiana more than $850 million last year, though Scott acknowledged roughly $50 million of capital improvements included in that number may have happened regardless.
Louisiana has saved an estimated $2.7 billion since the privatization began in 2013, Scott says. “This transition caused a lot of new money to come into the state,” he said.
The savings, Scott said, came primarily from the state leasing the facilities it previously owned under the defunct charity system to the nine private partners that provide indigent care, including Our Lady of the Lake Regional Medical Center in Baton Rouge. That move alone generated $525 million last year, the study said.
Scott’s economic consulting firm conducted the study on behalf of the Alliance of Public Private Partnership Hospitals, a group that represents the nine private partners. The alliance says it commissioned the study to tout the privatization deal’s economic benefits.
Edwards’ administration last year renegotiated the state’s contracts with the private partners in an attempt to save money. Those dealings included an agreement to bring a new emergency room to north Baton Rouge, which has lacked emergency care since Earl K. Long charity hospital closed in 2013 and Baton Rouge General’s Mid City ER shut down in 2015.
Scott’s study also examined how the state economy may have benefited from the increased savings, assuming lawmakers spent those savings on higher education and health care. If the state split the money 50-50 between the two areas—which Scott noted are the two areas most susceptible to budget cuts—it would have created nearly 13,000 new jobs, the study suggests. That move also would have boosted earnings in the economy by nearly $2 billion, the study says.
—Sam Karlin
