Lafayette General Health issues formal letter to State officials asserting termination of Cooperative Endeavor Agreement

Lafayette General Health (LGH) announced today that it has served a formal letter to the office of Governor John Bel Edwards and the Board of Supervisors of Louisiana State University and Agricultural and Mechanical College (LSU). The letter asserts termination of the Cooperative Endeavor Agreement (CEA) among Lafayette General Health System, University Hospital & Clinics (UHC), LSU and the State of Louisiana (State) due to lack of funding for UHC, beginning July 1, 2018.

“Such a decision is not taken lightly given Lafayette General Health’s commitment to care for its community, including the indigent and uninsured population; however, the continued reduction in funding for UHC makes its operation untenable and creates systemic risk for our not-for-profit, community-owned health system,” said LGH President David L. Callecod.

If the State appropriates full funding by the end of the anticipated second Special Session, LGH will rescind its notice of termination and continue UHC’s operations. If such funding is not provided, the termination will be effective June 30, 2018.

If UHC is not funded by June 30, as part of the termination and withdrawal process, either LSU must take over UHC’s operations or LGH will be forced to implement the following:

• Termination of over 800 hardworking, local employees
• Termination of Graduate Medical Education (GME) training programs, disrupting the training process of hundreds of medical students and residents
• Cessation of all services at University Hospital and Clinics

Under the terms of the CEA and the lease agreement for the UHC facility, the lease will automatically terminate upon the termination of the CEA, as will other agreements related to the CEA.

“It is unfortunate that the budget impasse the State finds itself in could lead to devastating, unrecoverable instability for thousands of employees, physicians, learners and patients who rely on the critical healthcare services UHC provides,” Callecod continued.

Prior to its partnership with LGH, LSU operated the state charity hospitals as training sites for medical students and residents. This included substantial training in Lafayette at UHC. In an effort to improve training programs and community access to health care, in 2013, the State approached LGH and requested that it assume operations for UHC. LGH entered into the CEA with LSU and the State pursuant to which LGH assumed the operations of UHC.

“LGH and UHC have invested massive time, energy and resources to improving access and the quality of care, while supporting the CEA implementation with critical operational infrastructure to ensure patients have the very best outcomes and experiences. This has resulted in better healthcare for the uninsured and Medicaid patients served by UHC,” Callecod continued.

Last year UHC saw 54,064 unique patients. In 2017 UHC conducted over 149,000 clinic visits (a 106% increase as compared to 2013), 2,733 surgery cases (achieved by opening a third and fourth OR) and 48,816 emergency department (ED) visits (by expanding the ED from 10 to 20 beds). UHC has more than doubled oncology infusion visits, opened a Medicaid Urgent Care Clinic and implemented strategies to increase access to primary and specialty care providers. All of this and more has been accomplished by LGH’s investment of over $11.5 million in capital improvements ranging from the installation of an electronic medical record system, pharmacy renovation, construction of new facilities and equipment purchases.

UHC creates revenue for the State in the form of large lease payments. It also alleviates significant expenses through the required provision of charity care and support of LSU. Almost all of the funds that are being eliminated are federal dollars or revenue contributed by UHC’s lease payment.

“While this process unfolds, UHC and LGH will continue to provide care for patients who count on us for critical, life-saving healthcare services. We will continue to care for the most needy and provide training for the future health care providers in Louisiana. We hope the State will see the benefit our partnership provides and appropriate the necessary funding to support UHC’s continuing operations,” Callecod said.

Patients who receive care at UHC are calling the hospital and asking about future appointments and whether or not they should pick up their medical records. We want patients to be assured that there are no changes to the services we provide them at this time. The hospital will remain open and be fully operational until June 30. And we are hopeful that the State will ensure full funding by that date in order for there to be no interruption in services.