With Louisiana facing a $250 million to $400 million shortfall this year, LSU Health-Shreveport's chancellor said on Wednesday the medical school doesn't have much breathing room when it comes to its financial reserves.
The school has a $70 million cushion and needs to maintain $50 million in the bank to preserve its accreditation, Dr. G.E. Ghali said during a special media presentation Jan. 11..
While the medical school is in no danger of closing, he added, further state budget cuts could endanger its specialized centers.
"If we were sitting on $100 million to $200 million, we could withstand one or two cuts and be OK. But we're not in that situation anymore, unfortunately.
"I don't know what the budget cuts are, but something has to give somewhere."
Ghali identified the following specialized centers are being at risk under more state budget cuts:
"I'm not going to let it affect the trauma center because it's very important," Ghali said.
LSU-Health staffers said these centers are not only needed for patient care but for specialized study for their more than 1,400 students.
"They can practice in a fairly challenging and fairly realistic setting," said Dr. Jane Eggerstedt, vice chancellor for academic affairs. "And they can do it over and over again and not have anyone stop them."
Ghali also said privatization of University Health Hospital, LSU-Health's teaching hospital, was one of the worst things to happen to the school.
He addressed how the medical school has been faced with dealing with decreased income and a battered image since Building Our Region's Future (BRF) took over management of University Health in 2013.
"We've had several students that wanted to come to school here that had decided to go elsewhere. We've lost, since the privatization, a little over 200 faculty members," Ghali said. "We'll probably hire 100 or 125 of those 200 back. But there's about 75 or so that we've not been able to fill, not hire back."
Further addressing the need to keep the medical school in Shreveport, the chancellor stressed how 88 percent of its medical students return to practice in Louisiana, making them first in the nation for keeping local college graduates in the state for medical school.
LSU-Health alumni practice in 61 of Louisiana's 64 parishes, and there are 496 alumni in Bossier Parish and 1,973 in Caddo Parish, Ghali said.
All in all, he said, LSU Health has had a $3 billion economic impact from Northwest Louisiana to the Mississippi Delta region.
To keep the medical school rooted where it is, Ghali outlined a plan of attack Jan. 11 that includes expanding its partnerships and increasing patient access and revenue.
Medical school departments are adopting mission-based budgeting, tightening their belts depending on their productivity, he said.
"Have all the department chairs being very careful about how we spend money. We've had a significant travel restriction," he said.
"We're also, in the long-run, looking at our mission-based budgeting for departments that are making a lot of money or proportionately making a lot of money to actually allow those specific departments to hire more people because they're high-revenue departments which, again, increases the funds flow back to the entire Health Sciences Center."
LSU Health's mission and BRF's mission currently are not in sync, and that needs to change if they are to progress, the chancellor said.
"Somebody's got to change. Patient care, education and research. I need a partner that agrees on those three things."
He continued: "I have a vision that our medical school will be the best medical school in the state within five years."
Meantime, Ghali said he and his staffers will keep working and watch what other state budget cuts come their way.
Louisiana Gov. John Bel Edwards has said another special legislative session will be needed to balance the budget if the midyear deficit is larger than $300 million,
And come June, a new cooperative endeavor agreement will need to be signed between the LSU Division of Administration and BRF.
Ghali said he hopes the negotiations will go better for LSU Health-Shreveport this time around, claiming they were underpaid $40 million under the previous agreement when compared to LSU Health-New Orleans.
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