The best thing to come Louisiana's way since the start of the Obama administration has to be the $475 million arbitration award won by LSU last week to replace the Katrina-damaged Charity Hospital in New Orleans. Resolving the drawn-out dispute with the Federal Emergency Management Agency marks the last big piece of unfinished recovery business to fall into place since the water went down.

   Along with $300 million the state has banked, LSU has a two-thirds down payment toward constructing a $1.2 billion academic medical center alongside the planned Veterans Administration Hospital on 70 acres near downtown. Now it can move ahead on forming the non-profit entity that can issue revenue bonds that won't count against the state's debt limit.

   A confederation of community and preservation groups still want the new hospital to be built within the shell of the old one, but LSU and state officials make a compelling case for development of a brand-new medical complex with room to grow. What makes the difference so far is that the opponents don't have enough allies at the State Capitol, whereas LSU has the big one.

   Gov. Bobby Jindal envisions the two hospitals forming a bio-medical corridor that will attract research grants and jobs to bolster the city's economy and serve its healthcare needs. He is unlikely to break ground on anything this big as long as he is governor, so the healthcare complex figures to be his most tangible and enduring legacy.

   As big a deal as it is though, progress toward the new teaching hospital says less about the future of healthcare in Louisiana than did news last month of a historic agreement in Baton Rouge. There LSU and Our Lake of the Lake Regional Medical Center agreed in principle for the city's largest hospital to house LSU's medical education and to take over its in-patient care.

   The public-private partnership means the state won't have to spend $400 million it doesn't have to replace its deficient public hospital there, which will creak along until 2014.

   This first-of-its-kind arrangement won't be the last such partnership but more likely marks the beginning of the end of Louisiana's unique state-run charity hospital system.

   Huey Long died in the old Our Lady of the Lake Hospital nearly 75 years ago. It's taken that long to begin to lay to rest the charity hospital model that grew from his populist regime, that served the people well for decades, but that no longer makes sense in a national system anchored by Medicaid and Medicare.

   Whatever kind of healthcare legislation gets through Congress will likely expand Medicaid coverage to more poor people while cutting way back on funding for safety-net hospitals. When the currently uninsured get Medicaid or private insurance coverage, evidence clearly shows they will shun charity hospitals for more modern facilities where they can expect better care. With the prospect of decreased federal subsidies, state officials and lawmakers predict the days of the charity-hospital system are numbered.

   As the smaller public hospitals around the state reach the ends of their useful service, instead of replacing them, the state is bound to enter into more public-private partnerships like in Baton Rouge, combined with more primary care clinics. The exception could be the University Medical Center in Shreveport, which enjoys the community support and balanced patient mix that the new teaching hospital in New Orleans will need in order to compete with other local providers.

   Just as the original Charity Hospital in New Orleans was run for decades by the beloved Daughters of Charity, Our Lady of the Lake's owner, the Franciscan Missionaries, has served the sick and poor in Louisiana since opening St. Francis Hospital in Monroe in 1911, The Lake in Baton Rouge in 1923 and Our Lady of Lourdes in Lafayette in 1949. LSU's patients will be in good hands.

   In communities around the state, the real future of quality healthcare for all citizens lies not with shiny new edifices built by the government but rather with more partnerships with institutions that have long been serving the need.