June 18, 2008 DHH, LSU, Tulane Announce Results of Strategic Plan Review for LSU Academic Medical Center in New Orleans

NEW ORLEANS, Jun 18, 2008 - LDH Secretary Alan Levine was joined in New Orleans today by Dr. Fred Cerise, LSU System vice president for health affairs and medical education and Dr. Benjamin Sachs, senior vice president of Tulane University and dean of the School of Medicine to deliver the results of a review of the proposed business plan for an Academic Medical Center in New Orleans. After seeking input from outside stakeholders, leadership from LDH, LSU and Tulane made revisions to several areas of the business plan, resulting in the next step toward a destination academic medical center for New Orleans.

“Governor Jindal has been firm in his commitment to building an innovative, technologically advanced destination academic and research medical center in New Orleans, and today is an important step forward,” said Secretary Alan Levine. “It is important we create a flagship medical institution that not only meets the needs of our neighbors here in Louisiana, but also becomes one of America's best training facilities for tomorrow's science, physicians and allied health professionals.  This opportunity brings with it the responsibility to ensure our plan is realistic and can be properly executed.  This is why we took a thoughtful and methodical approach to completing this review."

The review of the business plan did lead to significant changes in the financial assumptions made by the initial plan.  While the initial plan demonstrated a substantial profit, it is now believed the hospital will require funding support by the state.  However, this support will be minimized if the business plan is executed successfully.

"The return on investment in this institution should not be measured exclusively by the finances alone," added Levine.  "There is a significant return on this investment, if executed properly, which is measured more appropriately by making New Orleans a national destination for excellence in medical training and research." 

At a press conference Wednesday in New Orleans, the group announced that the future hospital will hold 364 acute care beds and 60 dedicated mental health beds, for an initial total of 424 beds with additional capacity for future expansion. Bed count was determined based on a methodology that considered future population growth, rates of utilization and LSU's projections for volume growth they expect to achieve with the new hospital.

“The LSU/VA medical center will provide superior health care in a world-class facility to anyone who enters its doors,” said Dr. Fred Cerise.  “The medical center will also be the cornerstone of the bioscience medical district in downtown New Orleans, contributing to the development of health care advancements that will benefit everyone and attracting to the region the best and the brightest in the health care professions.”

“Tulane supports the building of a new state of the art academic medical center, a place to train the next generation of physicians and to provide high quality care to the medically underserved,” said Dr. Benjamin Sachs. “Now that we have put the decision, to build or not to rebuild, behind us we need to focus our efforts on healthcare reform in Louisiana.   At the end of the day we all pay for the uninsured whether it is through higher taxes, higher insurance premiums or an unhealthy workforce.   As part of this reform, Tulane believes that we should develop a network of neighborhood health centers as a way to provide high quality, cost effective care for all of our citizens.   Physicians of the future need to be trained in not just an academic medical center but in communities because most physicians practice in urban and rural communities.”

“Now that we have agreed among ourselves on bed-count, our next step is to prepare the project for financing in a such a way that gives the state of Louisiana reasonable and predictable costs for the project, and maximizing the hospital’s appeal to the bond market to secure financing,” added Secretary Levine. “The more thorough we can be in this phase of the project, the less likely we are to encounter unexpected delays down the road. I applaud our partners at LSU, Tulane and in the Legislature for their cooperation and input and we look forward to continuing this successful collaboration.”

To find more information on the business plan for the facility, click here www.dhh.la.gov/offices/miscdocs/docs-87/MCLNOPlan.ppt

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