UMC - City Council Caves, Financial Uncertainty Rages On

Two big things happened in the past week.

First, the City Council voted to revoke the public rights of way in the UMC Footprint.

Second, as if that move in and of itself wasn't reckless enough at this point, the Kaufman-Hall report on the feasibilty of the UMC was presented to the UMC Board.  AFTER the City Council voted to revoke.

Credit must be given to Kaufman-Hall for its presentation.  We did not see the "doctored" (pun intended) version of the financial feasibility report that we anticipated.  Instead, the numbers appeared to be rather independent and objective.

Why?  The report revealed what has been said for some time now: the 424-bed design is excessive when looking at patient projections for the coming years.  The UMC Hospital should be smaller - needing somewhere between 330-403 beds.  Gee, isn't it great that we've arrived at that revelation now that the 37-acre site, which was excessive for even the terrible 424-bed suburban design, has been largely destroyed through expropriation and demolition?  Isn't it great that we now see that there's additional uncertainty about what will actually be built (if anything) AFTER the city council has already cowed itself before the juvenile rage of an angry, red-faced, table-pounding Jerry Jones...and whimpered in submission as it gave up its last bit of leverage over this project.  They aided and abetted the fait accompli - so did the Mayor's office, which was pushing very hard to make this happen.

Several other interesting things emerged.  The Kaufman-Hall presentation revealed that the annual state subsidy for the UMC will likely be around $100 million - up from a present figure at about $20 million.  That shouldn't be a problem at all.  You know, the State of Louisiana is just flush with cash right now.  It certainly wouldn't contemplate cutting $800 million in healthcare spending around the state at other facilities.  I'm sure Representative Fannin will just waltz along with this and pony up the dough, a smile on his face.  Importantly, policy changes could skew the estimate.  Under one scenario presented by Kaufman-Hall, if certain reimbursement policies change in a certain way, the annual required state subsidy for operations could be as much as - gasp - $147 million (see page 42).  There's also the $300 million ramp up funding that the state needs to find somewhere in its gold-plated pockets.  And the prospect of legacy debts...something not accounted for in the Kaufman-Hall report.

Several boosters of the UMC spoke before the UMC Board meeting, prior to the Kaufman-Hall presentation, exclaiming "This is our Super Dome moment!"  Wow.  They better have some crow on hand in upcoming months because this thing ain't over, the uncertainty keeps rising...and they might need to eat it.

Oh yeah - there's also this.  The state and UMC are now saying that they will look at financing the $400 million + gap in funding for the complex on the private market...despite all sorts of smokescreen assertions otherwise along the way.

Senator David Vitter, when are we going to see a press release?