Economic study claims state saved billions with private-public hospital partnership

Operating room at Baton Rouge General (Source: WAFB)
Operating room at Baton Rouge General (Source: WAFB)
Operating room at Baton Rouge General (Source: WAFB)
Operating room at Baton Rouge General (Source: WAFB)

BATON ROUGE, LA (WAFB) - Healthcare in Baton Rouge has changed a lot since 2013. Four years ago, the Earl K. Long Medical Center closed its doors for good. In its place, a new public-private partnership to care for the state's less fortunate began with Our Lady of the Lake. The transition in Baton Rouge was one of nine that took place statewide under the former administration to save on healthcare costs.

A new study, conducted at the request of the Alliance of Public Private Partnership Hospitals, claims the plan worked financially.

"This transition caused a lot of new money to come into the state," said economist, Dr. Loren Scott. Dr. Scott presented his findings to the Baton Rouge Press Club Monday. He looked at lease agreements paid by the private hospitals to the state, physician pay, and federal dollars coming in to match both of those. He also looked at capital improvements, like building upkeep, the state no longer had to pay.

The study estimates the state saved $2.7 billion over four years. "We're worried about the budget deficit we have right now. Think how bad the budget deficit would be today if this transition hadn't taken place," said Scott.

While many feared the closure of charity hospitals would create a lack of access to emergency healthcare, the study also shows more people are turning to urgent care centers and primary care doctors. The CEO of OLOL, K. Scott Wester, says they've worked hard to make sure everyone has the care they need.

"I think we're educating the community about the appropriateness of using the emergency room versus urgent care. We've made a lot of progress over the last couple of years related to the appropriateness and making sure that people have access to a primary care physician," said Wester.

The study also noted that the transition "save" graduate medical programs, including one at the Lake. Wester said they are also seeing a benefit there as many students complete their programs and choose to stay in Baton Rouge to work.

"If they do come back, you're thinking about the economic impact of having a physician come and practice 30 to 40 years. That's something that's hard to put a price tag on," said Wester.

The study did not look at the economic impact of hospitals not included in the private-public partnership, such as Baton Rouge General Hospital. BRG closed its mid-city ER in 2015, citing financial strain caused by an increase in uninsured patients using the ER for primary care.

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