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Mar 28, 2012 6:26 AM by AP

LSU officials: Jindal budget means hospital cuts

BATON ROUGE, La. (AP) - Leaders of LSU's public hospital system said Tuesday that Gov. Bobby Jindal's budget overestimates revenue for its hospitals and clinic network next year and that the system would have to impose cuts to close a multi-million dollar funding gap.

University hospital officials told the House Appropriations Committee that the 10 hospitals and their outpatient facilities that serve the poor and uninsured face an estimated $43 million in cuts in the fiscal year that begins July 1.

"We don't see what's in the executive budget as a standstill, flat budget for us," said Fred Cerise, LSU's vice president for health affairs, disagreeing with a Jindal administration assessment about the governor's proposed 2012-13 budget.

Meanwhile, another $41 million proposed in Jindal's budget recommendations for the hospitals is tied to several assumptions, including the sale of a New Orleans mental health facility, that haven't happened yet. If the assumptions don't pan out, the hospitals could face further reductions.

"We're at a point in our budget where a reduction in funding means a reduction in services," Cerise told lawmakers.

LSU runs seven south Louisiana hospitals through the Health Care Services Division, with its main hospital based in New Orleans. Another three hospitals in north and central Louisiana are managed through the LSU Health Sciences Center in Shreveport. The university trains new doctors and other health care professionals through the medical centers in New Orleans and Shreveport.

The Appropriations Committee is combing through Jindal's $25.5 billion spending plan for next year and will devise its own budget proposals within a few weeks.

Rep. Jim Fannin, chairman of the committee, told LSU officials that they were unlikely to see increased funding, and he warned them that the state's revenue picture could worsen.

"I think the challenge continues to be to look to those efficiencies because I think there still may be some reductions prior to seeing those revenues and levels of funding that you would like to see in your agencies," said Fannin, D-Jonesboro.

Any cuts would fall on top of several rounds of reductions that the hospitals have seen in recent years, which Cerise said have limited access to services for the indigent. LSU medical school leaders said future cuts could damage medical training programs, which prepare a large percentage of the doctors and other health professionals who work in Louisiana.

Hugh Mighty, a vice chancellor with the LSU Health Sciences Center in Shreveport, projected a $23 million shortfall for its three hospitals and medical center in next year's budget proposal. Roxane Townsend, head of the LSU Health Care Services Division, or HCSD, said the seven hospital divisions in south Louisiana would face a $20 million cut.

HCSD's budget cut would deepen if the Jindal administration doesn't generate $35 million from the sale of a mental hospital in New Orleans and if the city of New Orleans doesn't repay $6 million in recovery funds it borrowed from the state after Hurricane Katrina, money that is used in the governor's budget to fund the charity hospitals.

Townsend described a "worst-case scenario" that would involve widespread reductions across the seven hospitals and cut inpatient beds by 25 percent, emergency room beds by 40 percent and outpatient clinic volumes by 20 percent. But she said she didn't expect that to happen because LSU continues to negotiate its budget with the Jindal administration.

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