- Associated Press - Thursday, September 24, 2015

BATON ROUGE, La. (AP) - LSU is seeking to end its deal with the private manager of its Shreveport and Monroe hospitals, two years after hospital operations were turned over to a research foundation as part of Gov. Bobby Jindal’s effort to privatize the state’s charity hospital system.

The university system on Thursday notified the Biomedical Research Foundation of Northwest Louisiana, or BRF, that it considers the hospital manager in breach of contract. It gave the foundation until Oct. 5 to withdraw as hospital operator.

“We have exhausted all avenues to resolve our differences amicably and now must take action that we hoped would not be necessary,” LSU System President F. King Alexander said in a statement.

In response, BRF leaders vowed to sue.

Alexander sent the research foundation a July letter that outlined 11 pages of complaints about hospital management. He said BRF had not established a sustainable financial model for the hospitals, had damaged the LSU Shreveport medical school’s reputation and threatened the stability of both the medical school and the hospitals.

Negotiations to resolve the complaints didn’t end the dispute.

Foundation leaders, who run the hospitals as University Health, deny any mismanagement and say they have followed the contract’s terms. They’ve said LSU has thwarted efforts to ease the transition and remedy concerns.

In a statement Thursday, the foundation called the university’s action illegal and disruptive to patient care, and said it “will aggressively challenge LSU’s allegations in the courts.”

“The facts show that by all relevant measures of quality of care, patient service and financial management, the BRF and University Health have performed much better than LSU did when it managed the hospitals,” said Steve Skrivanos, chairman of the University Health System Board of Directors.

He described LSU’s claims of breach of contract absurd.

“We strongly believe the BRF and University Health will continue to own and operate the hospitals in north Louisiana once the facts are established,” Skrivanos said.

The university system said a group of “civic leaders” will help manage the hospital until LSU finds a new operator, but didn’t name any of the people involved. A new nonprofit corporation, Academic Health of North Louisiana Hospital Management Company Inc., has been formed to take over hospital leadership during the search for BRF’s replacement.

Alexander said the hospitals will continue normal operations during the transition, just with a different oversight board: “LSU pledges its continued commitment to provide unparalleled medical care in the Shreveport and Monroe communities.”

LSU refused to comment further on the dispute.

Jindal, running for the GOP presidential nomination, supported the university’s decision to end one of his signature privatization deals and defended the performance of the others.

“This is going to lead to an improved health care partnership,” Jindal spokesman Doug Cain said in a statement. He said the privatization deals reduce wait times, increase services and improve health outcomes.

Sen. Sherri Smith Buffington, R-Keithville, a strong advocate for LSU’s medical school in Shreveport, said the university contract with BRF contains detailed provisions about how to continue running the hospitals if the deal is severed. She didn’t expect disruption in services.

“It’s important to maintain a focus on the delivery of care and protecting graduate medical education,” she said.

BRF took control of the two north Louisiana hospitals in October 2013 through a no-bid contract, part of Jindal’s push to privatize most of the university-run public hospital system that cares for the uninsured and provides much of the state’s medical student training.

Privatization of the hospitals in Shreveport and Monroe was in contrast to the approach the Jindal administration took in south Louisiana, where LSU’s facilities are being overseen by companies that run other private hospitals in the area.

Created in 1986 to boost regional economic development, BRF had more limited resources and no background in hospital management. It had never previously run a patient care facility. The research foundation’s president and CEO was a Jindal campaign donor and, at the time the deal was struck, one of Jindal’s appointees to the LSU Board of Supervisors.

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