November 11, 2009
Rep. Cao vs. Retired Gen. HonoréBy Denis Keohane
The single Republican to vote for Speaker Pelosi's version of ObamaCare is Rep. Anh "Joseph" Cao, who replaced William "Cold Cash" Jefferson in Louisiana's 2nd Congressional District. Rep. Cao's engagement in bi-partisanship immediately raised the obvious question as to what was offered in return, and Michelle Malkin provides an answer:
Charity Hospital got brief media mention last month when President Obama took questions at a Town Hall meeting in NOLA. The NY Times reported that a man specifically addressing Charity Hospital asked why NOLA was being "nickel-and-dimed in our recovery," something he says he expected from the Bush administration but not from President Obama. The man also stated:
We have entered the age of trillion-dollar deficits wherein a third of a billion taxpayer dollars perhaps can be rightly seen as nickels and dimes! I looked into the story of Charity Hospital, and it is another depressing and cautionary tale of government in action that should greatly concern anyone about the prospect of the state controlling the nation's health care system. It is also another reminder that the "R" by a politician's name does not mean fiscally responsible with our tax monies.
The eighteen-story main Charity Hospital building, pictured here, was built in the 1930s. The hospital is administered by Louisiana State University (LSU) as part of the Medical Center of Louisiana at New Orleans (MCLNO), which includes University Hospital. Its first floor and basement were flooded by 6' to 8' of water for weeks during the Katrina disaster in August 2005. Almost immediately, plans were set in motion by officials at LSU and elsewhere to bilk the country's taxpayers out of hundreds of millions by getting FEMA to pay almost the entire cost of the full replacement of the hospital.
The Stafford Act (Disaster Relief and Emergency Assistance Act of 1988) and FEMA guidelines stipulate that federal taxpayers will foot the bill for ninety percent of repair costs to the hospital, or, if the damage is more than half the cost of rebuilding the facility, they will shoulder ninety percent of total reconstruction costs. FEMA contracted with a private engineering firm that specialized in medical facilities to estimate the cost of repairing flood and wind damage to the hospital. The estimate to make the repairs was $23.9 million. LSU contracted its own firm which calculated repairs to cost $257.7 million. However, the LSU-funded estimate counted repairing pre-Katrina problems and deficiencies at the hospital, not just those that were Katrina-related.
As the Times-Picayune reported, the aging hospital was
The NY Times reported:
Addressing the discrepancy, FEMA spokeswoman Nicol Andrews said:
Andrews also said that any monies provided by FEMA based on the cost of repairs could legitimately be put toward the construction of a new facility if so desired and did not need to be spent on repairs. Even as those estimates were being prepared, the campaign to soak the federal taxpayers had begun. In December 2005, the NY Times reported that even though doctors and medical staff at the hospital were trying to use the hospital's facilities they were being told to leave by officials and were ultimately barred from entry.
Some of that Times report reads like a review of a play at the theatre of the absurd. When officials granted the media a tour of the facility in October 2005, they insisted that the reporters wear protective gear and sign a health release. That elicited scorn from doctors who had been cleaning the facility for weeks wearing shorts and T-shirts. A consulting engineer for the state of Louisiana assessed the building two years before Katrina and recommended it be replaced because of problems relating to infrastructure and outmoded layout. After Katrina, the same engineer cited flood damage and falling asbestos as a concern that made the building unsafe. The Times reported:
There is a slide show of the hospital after the clean-up here, and the facility does not appear destroyed by any means. However, by February of this year, USA Today reported that the campaign has been having growing success with this:
Note that a damage repair estimate increase of over 400% from $23 million to $99 million "may be inflated"! FEMA has already increased its offer sixfold! That was not enough, though!
Last month, Governor Bobby Jindal (R-LA)'s administration filed a request with the federal government that a three-judge panel of administrative law judges decide how much federal taxpayers, through FEMA, should be required to pay. That avenue was opened by a provision to FEMA funding authored by Sen. Mary Landrieu (D-LA). The state is insisting that FEMA owes 90% of the "replacement value," or $492 million. That is about $350 million in nickels and dimes more than the $150 million already offered. Congressman Cao had also been lobbying the Obama administration for the $492 million and stands to benefit politically if that is granted.
LSU is hoping that with those funds, it will build a $1.2-billion-dollar replacement hospital. That is seven hundred million more than what they hope to get from the federal taxpayers. The difference is to be made up by $300 million from the state and the rest by issuing revenue bonds which would have to be repaid. As NOLA.com reports, "The higher the federal reimbursement, the less borrowing would be required to build the hospital."
Of course, but is it the obligation of the federal taxpayer to offset the borrowing costs of what LSU wants but doesn't want to be responsible for? In November of 2005, Don Smithburg, chief executive officer of the LSU Health Care Services Division, said estimates to replace Charity and its associated University hospital combined would cost about $567 million, excluding equipment or furniture. That means that the $700 million that could be provided by the state of Louisiana and the revenue bonds could build the new hospital even without a cent of FEMA money! That FEMA has offered $150 million now means that LSU needs only about $400 million to replace the hospital! If they choose to build a better facility over mere replacement, they are free to do so. However, LSU and Louisiana want $500 million from the citizens of Utah, New Jersey, North Carolina, and elsewhere in the USA so they can build a hospital costing twice as much as the replacement cost of the one that was damaged!
Everyone will no doubt remember retired Lt. Gen. Russel Honoré, who became something of a national treasure for his bringing order and sanity to NOLA in the chaos that was the aftermath of the flooding. He also famously advised the media, "Don't get stuck on stupid!" Last May, the Times-Picayune reported that Honoré nailed it again when he testified to a Congressional House Committee that "The state of Louisiana needs to pay for its own damn medical center":
Meanwhile, Rep. Cao ridiculed FEMA's obviously failing attempt to protect the taxpayer's money as "talking about the value of doorknobs and toilets."
This story is not an oddity. It demonstrates how government operates and why its powers and reach into our lives should be limited. The Stafford Act was passed under the rubric of a compassionate nation helping fellow citizens who have suffered from disaster. Yet no matter how noble the claim, appearance, or even genuine intent of the statute, there will be those in and out of politics who will manipulate the process for the political benefit of themselves and their chosen constituents. The federal taxpayer is not expected to die of a thousand cuts, but to merely bleed through a thousand or ten thousand or a hundred thousand cuts to benefit those who know how to game the system. If the federal government does take control of the health care industry, forget the lofty claims and compassionate rhetoric as political connections become more important than medical conditions in the allocation of resources. Then, too, with all the promises of lowering and controlling health care costs with greater government control of the industry, note that a federal agency actually trying to protect the taxpayer's funds has already agreed to pay six times its original, professionally prepared estimate!
One can hope, though, that there is a Republican primary next year for the LA-2 Congressional seat -- and that retired Lt. Gen. Russel Honoré challenges the incumbent, Congressman Cao.