Looking back on the LSU Hospital privatization fiasco, it becomes easy to point the finger of blame in several directions.
And to a lesser extent, though by no means blameless, is the Louisiana Legislature.
The legislature has been complicit in many of Gov. Bobby Jindal’s other misadventures, most notably the unorthodox—and, it turned out, unconstitutional—method of funding the governor’s school voucher program. Lawmakers fell all over themselves in 2012 in approving that little scheme that eventually blew up in everyone’s faces when the courts rejected the manner in which Act 2 diverted money from local school districts to cover the cost of private or parochial school tuition.
In fact, Jindal’s entire education reform package, passed in such haste in 2012, quickly grew to more resemble a train wreck than legitimate reform.
But the legislature, even though it never drew a line in the dust even as it capitulated to Jindal at every turn, in the final analysis, had little say-so about nor any recourse in preventing the wholesale giveaway—disguised as privatization—of the six hospitals, a maneuver that imploded Friday with the decision by the Centers for Medicare and Medicaid Services to reject the deals that would have turned over to private operators the LSU medical centers in Shreveport, Monroe, Lafayette, Houma, Lake Charles and New Orleans.
Even as Jindal’s rubber stamp LSU Board of Stuporvisers was rubber-stamping a contract containing 50 blank pages in the infamous conflict-of-interest deal handing over University Medical Center of Shreveport and E.A. Conway Medical Center of Monroe to the Biomedical Research Foundation of Northwest Louisiana (BRF), legislators were voicing concerns over the warp speed at which the administration was moving to ram the agreement down the throats of an unsuspecting public.
In fact, a resolution passed unanimously in the Louisiana Senate at the urging of Sen. Ed Murray (D-New Orleans) called for the Joint Legislative Committee on the Budget to agree on the privatization plans before any details were to be finalized. A similar resolution was also passed in the House.
Resolutions are just that: resolutions, with no power of law. Jindal said—and an attorney general’s opinion supported the position—that legislative approval was not required in order for the LSU Board to agree to lease the hospitals. An attorney general’s opinion, like a legislative resolution, does not carry the weight of law, but does give the governor stronger footing.
Jindal, for his part, made it abundantly clear that he would move the privatization plan forward with or without legislative support. He said the legislature did not have the authority to vote down the proposals—in effect, saying his administration was ready to ram through the proposals without regard for even a pretense of democratic procedure.
Of course he did say that he would agree to take any advice from the legislative committees into consideration. “If they propose changes to the law, we’ll look at that legislation,” he said.
But we all know what happens to those who have the temerity to disagree with Jindal, don’t we? They’re summarily teagued, as in Tommy Teague, erstwhile Director of the Office of Group Benefits (OGB), who was shown the door on April 15, 2011, when he didn’t jump on board the OGB Privatization Express quickly enough. Six months before that, it was his wife Melody was fired from her state job after she testified before the Commission for Streamlining Government. More than a dozen met the same fate, including LSU President John Lombardi and at least four legislators who found themselves suddenly removed from their committee assignments for “wrong-headed” voting.
But easily the most significant, most ill-advised, most flagrant, most unwarranted demotions were those of two respected doctors who didn’t bite when Jindal dropped his privatization bait into the water—doctors any organization would be proud to have on staff (and now, two such organizations indeed have them after in sheer frustration, they finally left Louisiana).
LSU Health Care System head Dr. Fred Cerise and Interim Louisiana Public Hospital CEO Dr. Roxanne Townsend were demoted just days apart in 2012—Cerise in late August and Townsend in early September—following a July 17 meeting at which former Secretary of health and Hospitals (DHH) Alan Levine first pitched a plan to privatize the state’s system of LSU medical centers.
Levine was at the meeting on behalf of his firm, Health Management Associates (HMA).
Also present, besides Cerise, Townsend and Levine were then-LSU President William Jenkins, DHH then-Secretary Bruce Greenstein, LSU Medical Center Shreveport Director Dr. Robert Barish, HMA CFO Kerry Curry, LSU Health Science Center Shreveport Vice Chancellor Hugh Mighty and LSU Board of Supervisors members Rolfe McCollister, Bobby Yarborough, John George (remember that name) and Scott Ballard. LSU Health Science Center New Orleans Chancellor Larry Hollier and Vice Chancellor for Clinical Affairs at LSU Health Sciences Center New Orleans Frank Opelka participated by teleconference.
The meeting was held in the LSU president’s conference room.
Both Cerise and Townsend expressed reservations about Levine’s proposal but several members of the LSU Board of Supervisors who were present at the meeting “indicated they want LSU’s management to pursue this strategy,” according to a summary of the meeting prepared for Jenkins by Cerise.
Along with his two-page summation of the meeting, Cerise also submitted a third page containing a list of five concerns he had with the privatization plan pitched by Levine. It was that list of concerns which most likely got Cerise teagued as head of the LSU Health System via an email from Jenkins.
Levine, according to Cerise’s notes, recommended as an initial step that LSU sell its hospital in Shreveport (LSU Medical Center) and use the proceeds to “offset budget cuts for the rest of the LSU system.”
He suggested that the buyers would form a joint venture with LSU, invest capital into the facility and develop a strategy for LSU “to more aggressively compete in the hospital market.”
“The LSU board members present indicated they want LSU’s management to pursue this strategy,” Cerise’s notes said. “Greenstein stated that LSU should look to generate two years of funding to address the state funds shortfall in the system through the sale of Shreveport’s hospital.”
It was at that point that Cerise indicated his concern that such a strategy would take time to develop and that LSU would likely need to go through a competitive public procurement process and “likely legislative approvals.”
It was subsequently determined that legislative approval was not legally required; all that was required was for the legislature to be informed of the administration’s actions.
“There appeared to be agreement that LSU develop a plan that would not result in closure of hospitals,” Cerise’s notes said. “When the question was posed to the group, ‘Will LSU close hospitals,” George responded, ‘We hope not.’ The clear message was that the board members did not want LSU to proceed with any hospital closures at this point.”
Since that meeting, Earl K. Long Medical Center in Baton Rouge and W.O. Moss Medical Center in Lake Charles have each closed.
“I am asking that you share this memo or at least the substance of it with the full board to ensure they are informed and that their direction to us that we delay definitive budgetary action until the end of August to better assess the likelihood of a Shreveport sale with a statewide distribution of the proceeds is clear and unambiguous,” Cerise said in his memorandum to Jenkins.
At the conclusion of the meeting, Jenkins called for the creation of a task force to include then-Commissioner of Administration Paul Rainwater, Greenstein, George, Yarborough, McCollister, Ballard, Mighty, Barish, Hollier, Cerise and Townsend.
But in a matter of weeks, Cerise and Townsend were removed from their respective positions and reassigned and Opelka was promoted to Cerise’s position.
Last May, only months before he resigned to take a position in Texas, Cerise was invited by Sen. Murray to testify at a meeting of the Senate and Governmental Affairs Committee. What ensued speaks volumes about the administration’s penchant for secrecy and its intolerance for dissenting viewpoints and is illustrative of Jindal’s general arrogance and disdain for the legislative process.
The committee wanted more information about the proposed privatization of the LSU system’s hospitals and the obvious choice as the most knowledgeable witness was Dr. Fred Cerise, whose integrity is the very antithesis of Jindal’s.
So, naturally, Cerise was barred from testifying. Dissenting opinions—even intelligent, reasoned ones—are not welcomed by this governor who simply cannot bring himself to listen to the advice of others. Murray said he was told that Cerise’s request for a personal leave day to testify was denied. Murray was joined by several other senators in complaining that the denial of an information request from a lawmaker was inappropriate.
Board members, Dr. John George and Ann Duplessis, apparently with straight faces, disavowed any knowledge about Cerise’s not being able to attend the meeting and promised to look into the matter and report back to the committee.
Amazingly, lawmakers appeared to ignore that conflict of interest we alluded to earlier even as the LSU Board of Stuporvisors unanimously approved that contract. No one uttered a peep as that same Dr. John George of Shreveport, sitting as a voting member of the LSU Board, cast his vote.
The CEO of BRF, which awarded the contract for the Shreveport and Monroe medical facilities, is (trumpet fanfare) that same Dr. John George but not to worry: Jindal assured us there was no conflict of interest there.
Almost lost in all of this is the fact that more than 5,000 employees were laid off as a result of the privatizations which now have been disallowed. And for that, we look to the Louisiana Civil Service Commission as the third culprit behind Jindal and the LSU Board of Stuporvisors.
After all, you can’t put the genie back in the bottle.
The Civil Service Commission, which must approve any layoff plan, first rejected the administration’s privatization by a 4-3 vote but agreed to reconsider the proposal when the administration said it would provide additional information.
The next week, the board met again and commission member D. Scott Hughes of Shreveport apparently saw the light and inexplicably switched his vote from no to yes. More importantly, two other members, Dr. Sidney Tobias of LaPlace and commission Chairman David Duplantier of Mandeville, took the easy way out: they simply did not attend the meeting and the final vote that put 5,000 employees on the street was 3-2 in favor of Jindal.
Granted, commission members don’t receive a salary for their service but if Hughes could drive in from some 250 miles away—even with his yes vote—then surely commission Chairman Duplantier and Tobias could have, should have, found a way to drive in from about 75 and 50 miles out, respectively.
On a matter of such import, their no-show was nothing less than gutless and both should resign from the commission. They agreed to serve and their votes on this issue were of extreme importance—to the administration of course, but especially to those 5,000 employees whose livelihoods depended on the whims of seven five people they’d never met.
And then there’s that almost overlooked matter that’s lost in all the frenzy—one of utmost urgency: where will the state’s poor now seek medical care?
And the fingers of blame point directly at Jindal, the LSU Board of Stuporvisors, and the Civil Service Commission.
So now, after the approval of a contract with its 50 blank pages, after the termination of all those employees, after Jindal’s flimflamming his way around the legislative process, after the demotion and eventual loss of two valuable members of the medical profession, after DHH Kathy Kliebert’s assurances (as late as last week) that everything was just peachy, another wing of Jindal’s house of cards has come tumbling down.
If this is indicative of the way he runs a state—and all the evidence says it most assuredly is—imagine how, as president, he would fare in a faceoff with Vladimir Putin—even with the help of Jimmy Faircloth.
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