BRF leaders hosted a called BRF Board and Invited Guests Meeting Monday, Aug. 21, 2017 to update the Board and community members on three key issues facing University Health System (UHS).
Issue No. 1: North Louisiana hospitals are being discriminated against with respect to available funding.
In its Memorandum of Understanding (MOU), the State’s Division of Administration has offered an ultimatum to University Health: Accept a discriminatory funding model and an unfair contract and give up the antitrust suit against Willis-Knighton, or face termination. Below is a comparative analysis of a proposed MOU being offered by the State’s Division of Administration (DOA) to UHS and University Medical Center New Orleans (UMCNO).
Issue No. 2: The State’s funding model being utilized since privatization is now fundamentally broken.
UHS, though responsible for almost $1 billion in savings and revenue for the State, receives $0.32 in supplemental funding per patient versus South Louisiana’s University Medical Center New Orleans’ (UMCNO) $1 per patient. Overall, UMCNO receives $410 million in supplemental funding versus UHS’ $241 million, despite the fact that UHS provides approximately two times the service and sees twice as many patients.
Any partner of LSU School of Medicine (SOM) in Shreveport and the State to operate University Health System would require adequate State support for the hospital and SOM operations, reasonable working capital, funds for deferred maintenance (UHS inherited more than $150M in deferred maintenance), and Fair Market Value (FMV) for LSU SOM service or additional State support for anything above that. UHS/BRF has not been offered these terms despite saving the State millions and generating more new revenue for the State than any other private hospital partner, and drastically improving services versus what the former LSU-run hospital was able to provide.
At the same time that UHS faces these discriminatory contract terms, payments to the LSU SOM by BRF/UHS have increased far above FMV.
*Physician Services Agreement/UH costs represents money being paid to LSU.
State funding for UHS continues to be reduced. Ongoing cuts and increased costs have impacted UHS negatively by $20.4 million in SFY 2017 alone. This broken funding model, in which the State has reneged on its terms agreed to on the outset of the partnership, has been detrimental to UHS. UHS’ survival under any partner’s control is threatened by these unfair contract terms and inadequate funding.
Issue No. 3: A plan is being implemented by Willis-Knighton, the LSU System
and certain officials of State Government to oust BRF’s community stewardship and threaten University Health System’s survival.
Commercially insured patients are critical to University Health’s viability. Commercially insured patients offset losses incurred by accepting patients who do not have private insurance. Without this patient base, UHS would not be able to fulfill its mission as a safety net hospital.
The sole purpose of BRF’s antitrust suit against Willis-Knighton is to prevent a healthcare monopoly in Northwest Louisiana, which would result in higher insurance premiums and healthcare costs in our community. Willis-Knighton is attempting to take University Health’s commercially insured patients, leaving UHS without its mechanisms of balancing costs of its services to patients who do not have private insurance. Below are excerpts of public documents filed in BRF’s antitrust suit and evidence that Willis-Knighton is using predatory practices to gain a monopoly in Northwest Louisiana.
*Email from LSU’s Joseph Miciotto to LSU Neurologist Alireza Minagar on Oct. 3, 2014
Also included in the documents is evidence that Willis-Knighton has conditioned an unknown sum of money to be given to LSU SOM provided that the State intervenes in the antitrust suit against Willis-Knighton. As outlined in the terms of the MOU, the State has conditioned its partnership with BRF on the dismissal of the antitrust suit against Willis-Knighton.
The State’s anticompetitive demand in the MOU would allow Willis-Knighton to take UHS’ commercially insured patients, destroy UHS’ ability to care for the poor and underserved, drive up insurance premiums and healthcare costs for North Louisiana and position Willis-Knighton to maintain its unlawful monopoly.
*Email from Willis-Knighton lawyer Dickie Patterson to LSU lawyer Patrick D. Seiter on June 20, 2016
What can you do to help University Health System?
We urge you to contact the State’s Division of Administration and your representatives and ask them to stand in opposition of predatory practices against University Health System. We ask that you use these provided facts to call the Northwest Louisiana delegation together in defense of our safety net hospital and its vitality in our region.