Proven partnership in LSU Health

The federal government recently withdrew $859 million in support for Louisiana’s health care system by reducing something known as the Federal Medicaid Assistance Percentage to Louisiana. The percentage was reduced from 71.92 percent to a projected 65.51 percent, which is the lowest federal match rate Louisiana has had in more than 25 years. Congress took this action without warning and after the Louisiana legislative session ended. This means that the state must take steps to live within its means by funding healthcare services at LSU hospitals in a way that is more efficient and less expensive.



The federal government’s reduction has brought attention to the national problem facing every community across the country in all aspects of health care. As a nation, we have continued to provide money as the solution for health care rather than to consider alternative means for health care delivery. We can save health care dollars through better quality, safer more efficient care and by recognizing patient preferences.

While the federal government’s reduction presents a challenge to our state; it’s an opportunity to redesign the system so that LSU Health can better achieve our core mission of quality patient care and educating the doctors of tomorrow.



In order to address the federal government’s reduction, I proposed, and the LSU Board of Supervisors recently approved, a plan that will keep all LSU public hospitals open, protect and strengthen graduate medical education programs and maximize public-private partnerships. Our plan prioritizes services and maximizes strategic partnerships with private hospitals and community providers to fill service gaps and protect access to critical services.



Maximizing public-private partnerships is critical to the success of our plan. These partnerships will cover the gaps in care created by the challenges in the loss of federal support for state-funded health care and they provide a more effective, less expensive way of delivering services.

Why is this important? The reality is that Louisiana is the last state still operating its own hospitals. The state hospital system costs 30 percent more to run than private hospitals pay for providing the same service. Hospital costs are also more than outpatient costs for the same services. Moving care to private partners and in outpatient setting would improve care and reduce costs.

Every community will have to do what’s best for their people, but an example of one type of partnership is something that we have pursued in Baton Rouge. We announced an agreement between LSU and Our Lady of the Lake (OLOL) hospital to create a partnership that will improve Graduate Medical Education, expand access to healthcare services for the poor, and save the state $400 million. The partnership provides an example of the flexibility offered by developing private hospital partnerships, where OLOL will offer patients access to more specialized services, including Baton Rouge’s first level one trauma center. LSU will focus on delivering outpatient care, including the construction of a state-of-the-art urgent care center in north Baton Rouge.

Additionally, we have already seen positive results for patients and Graduate Medical Education where LSU Health has partnered with the private delivery systems. In the past, most safety net maternity care was centered at the public hospitals. Today, deliveries of many babies are taking place at private institutions. LSU Health physicians followed the patients into these non-public care settings and so too with our residents in Graduate Medical Education. In addition, the newborn services moved into private institutions along with their mothers.

An LSU public physician group with graduate medical education now meets with a private in-patient care delivery system in a public private partnership. Here are the results of this partnership – the National Health Care Disparities Report found that instead of losing ground on clinical outcomes, the care provided by this partnership for maternity care shows improvement over past years. In short, public-private partnerships are proven to be better for care.

We can build on this success. The redesign of our health care system will be a challenge, but it’s an opportunity to improve the way we deliver health care for patients. The previous system was focused more on funding levels and not outcomes. We can do better. As we successfully implement our new plan, it will improve patient care, better train our future doctors, and be a model for the nation.