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The Economic Impact of Privatization of Louisiana’s Formerly Publicly Run Hospitals on the University Health Region

May 10, 2017
By Loren C. Scott

This study, written by Louisiana State University (LSU) economics professor Loren Scott, studies the economic effects of Gov. Bobby Jindal’s (R) privatization of the state’s hospital system in 2013.

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This study, written by Louisiana State University economics professor Loren Scott, studies the economic effects of Gov. Bobby Jindal’s (R) privatization of the state’s hospital system in 2013.

Privatizing health care for lower-income earners significantly changed how Lousiana helped needy citizens, Scott writes.

“Beginning in early 2013, an important change took place in the way healthcare was to be provided to the lower income strata of Louisiana citizens,” Scott writes. “For decades, these services were provided by state-run hospitals, a model used in only one other state in the U.S. Under the Jindal administration this model was changed to a private-public partnership in which the same—but improved—services were provided via privately run hospitals and graduate medical education was preserved in the state.”

Privatizing health care resulted in quantifiable improves for Louisiana residents, Scott writes.

“There are other gains to the state—really to the recipients of the care—such as reductions in wait times at emergency rooms, an increase in out-patient visits, the elimination of waiting lists for prescriptions and primary care, an expansion of specialty services offered, and  transitions to electronic medical records, etc.,” Scott writes.“By the end of 2016, it is estimated that the privatization effort created just over $1 billion in new sales at businesses in the University Health Region, nearly $400 million in new earnings for households in the region and an average of 2,818 jobs a year.”