BATON ROUGE, La. (AP) — The LSU Board of Supervisors agreed Wednesday to negotiate turning over the operations of university-run hospitals in Shreveport and Monroe to a nonprofit research foundation whose interim president sits on the LSU board.
The board backed an arrangement that LSU officials expect to lead to the Biomedical Research Foundation of Northwest Louisiana taking over management of the LSU Health Sciences Center in Shreveport and E.A. Conway Medical Center in Monroe and their clinics.
LSU board member John George is vice chairman of the board and interim president of the research foundation.
George didn't vote on the agreement and walked out for the discussion. He's seeking an opinion from the state ethics board about whether he can maintain his LSU board position and his job with the research foundation.
Board of Supervisors Chairman Hank Danos said the panel is concerned about any perception that there might be a conflict of interest in the arrangement, but he said he's comfortable with how the board has handled the negotiations and George's recusal.
"The board is going to be very thorough with how we go forward from here," Danos said after the meeting.
Negotiations are ongoing about the formal lease arrangement and payments, so a final deal is far from complete.
The LSU System is seeking to privatize nearly all of its public hospitals as a way to reduce costs after Republican Gov. Bobby Jindal assigned much of a federal Medicaid funding cut to the hospitals that care for the uninsured and train many of the state's medical students.
The Shreveport hospital has had a longstanding relationship with the Biomedical Research Foundation, which was created in 1986 to boost economic development through medical research.
Hugh Mighty, vice chancellor for clinical affairs at the LSU Health Sciences Center-Shreveport, said the privatization will help stabilize funding for the hospitals and the university's medical school in Shreveport.
"We believe this is the best way for us to move forward," Mighty said.
Agreements have been announced that will turn over management of the university hospitals in New Orleans, Lafayette, Houma and Lake Charles to nonprofit corporations that run private hospitals in the regions. Administration officials say similar deals also are in the works for LSU's hospitals in Pineville and Bogalusa.
The research foundation's management of the Shreveport and Monroe hospitals will be different because it doesn't currently operate a hospital.
None of the agreements have resulted in approved lease and financial arrangements so far. Negotiations are continuing, according to Frank Opelka, LSU vice president for health affairs and medical education redesign.
Hefty savings from the privatizations are assumed in Jindal's budget proposal for the coming fiscal year. Meanwhile, employee levels are shrinking at the hospitals amid the uncertainty, curtailing services.
Employees of the university-run hospitals and affiliated clinics set for privatization will face layoffs and then have to reapply for their jobs with the new managers if they want to keep their positions.
Jindal administration leaders say the charity hospital model is outdated and costly. They say the privatization plans will maintain health services and graduate medical education programs.
Critics say the shift could damage the state's safety net and could leave some patients without adequate access to health care.