HUD clears $74 million for new Charity in N.O

The U.S. Department of Housing and Urban Development has formally released $74 million for the land purchase and design of a new LSU-VA Charity Hospital in New Orleans.

But the money came with 25 questions raised by HUD Secretary Alphonso Jackson about the size and scope of the hospital and the state’s proposed health-care delivery system.

The HUD concerns will have to be addressed before the agency releases the remaining $226 million in Community Development Block Grants slated for construction of the facility. Jackson revealed the agency’s intent Thursday in a letter to Gov. Kathleen Blanco.

By releasing the initial funds, Jackson said the state can move forward with its plan to design a modern teaching hospital that can serve as a hub for graduate medical education and academic research and serve as an economic driver for downtown New Orleans.

“Because we recognize the value of this hospital to the city and the recovery effort, we are providing a partial release of funds,” Jackson wrote.

But the money will not come without strings attached. HUD’s Department of Health Care Facilities will determine the need and financial feasibility of the hospital project. Jackson expressed concern that the Charity proposal is larger than similar hospitals in comparable cities.

State consultants are recommending the construction of a $1.2 billion hurricane-proof LSU teaching hospital, trauma center and medical research facility. The proposed 484-bed center would be part of a joint development with the U.S. Department of Veterans Affairs.

Jackson is concerned that the size of the facility may be inflated because of a low projection of beds available at other hospitals, he said. The proposal also appears to be driven by an inpatient model that runs counter to the “medical home” and outpatient care clinic format the state said it will adopt, Jackson said.

Jackson also expressed worry over the cost estimate, noting that projections have almost doubled from $630 million in October 2006.

“The current estimate represents a cost per bed well above the national average,” Jackson said.

Though the hospital is not going to be backed by mortgage insurance from the Federal Housing Administration, Jackson said it was in the “best interest of United States taxpayers” that the hospital meet the same financial test.

Jackson also questioned whether the state has a backup plan should the VA drop out of the proposal. The state has targeted a 66-acre site surrounded by Canal Street, South Claiborne Avenue, Tulane Avenue and South Rocheblave Street in downtown for the proposed hospital that the VA has said it still has an interest in.

State Sen. Sen. William “Joe” McPherson, D-Woodworth, said Thursday he thinks the state will be able to address the HUD concerns.

“We had a complete study done by national consultants that we can make available to them,” said McPherson, who authored the legislation to revamp Louisiana’s health-care system for the poor and uninsured.
source:www.2theadvocate.com