Louisiana's Charity Hospitals need $35 million to continue services at current levels

Louisiana's Charity Hospitals will have to begin cutting services this summer unless the state Legislature provides them with an additional $35 million, Louisiana State University officials told the state Senate Finance Committee on Monday, the New Orleans Times-Picayune reports.

Michael Butler, interim CEO of the hospitals division, did not identify which services would be cut if the funds are not found, but he wrote in a letter that those decisions would be made shortly after July 1. He wrote, "We cannot be specific regarding which clinics or services will be closed at which hospitals at this time; however, this will certainly mean drastic reductions in the services available to those who have no other viable options."

According to the Times-Picayune, Charity's $30 billion budget for next fiscal year is about $111 million under the state's constitutional limit on spending, which can only be changed by a two-thirds vote. The system's budget is expected to increase by $89 million next year to $952 million; however, the majority of those funds will be designated to "continuation costs" and to restore services in New Orleans.

According to Fred Cerise, LSU's vice president for health care, the system needs an additional $55 million next year to avoid using money from its equipment and upkeep funds. According to the Times-Picayune, "The problem stems largely from costs -- such as prisoner care, outpatient prescription drugs and doctor salaries -- that cannot be reimbursed with federal Medicaid dollars" (Moller, New Orleans Times-Picayune, 6/3).