Discussing Financial Status Of New Orleans Acute-Care Hospitals

Ruzanna Harutyunyan's picture

Louisiana Department of Health and Hospitals Secretary Alan Levine last week said that five of the 10 acute-care hospitals in the New Orleans area continue to have financial problems three years after Charity Hospital was shuttered after Hurricane Katrina, the Baton Rouge Advocate reports.

At a meeting with the Louisiana Recovery Authority, Levine said the five hospitals "are taking a beating," but caring for uninsured patients who once sought care at Charity is no longer the biggest financial challenge facing the hospitals. Levine said, "Frankly, the uninsured issue is not much of an issue anymore because most of the uninsured (patients) have gone back down to pre-Katrina levels," adding, "The bigger issue is operating costs."

The Advocate reports that the problems facing the five hospitals underscore "the critical condition of health care in the New Orleans area." According to Levine, who is seeking federal aid for these metro area facilities, "Some of the hospitals are at risk of having their bonds go into default" because of the current credit market crisis facing the nation. Levine added that since Katrina, hospital personnel salary and benefits costs have increased by nearly 20%. The Advocate reports, "Hospitals have struggled to retain staff amid decreasing revenue and sharp population drops since Katrina."


Levine said creation of a not-for-profit governing board for the new Louisiana State University/Department of Veterans Affairs hospital would protect it from market fluctuations. This facility would replace Charity Hospital in New Orleans. "We firmly believe that we should unleash the entrepreneurial spirit of the CEOs of those (charity) hospitals so they can be competitive," Levine said, adding, "We have to invest in the right governing model so that hospital can be competitive on a national scale. We don't want to build a hospital that just does what we've always done" (Johnson, Baton Rouge Advocate, 11/21).

LSU-VA Hospital Campus

In related news, the New Orleans Times-Picayune reports that state and federal officials are expected to announce plans this week for the new LSU-VA hospital campus. According to the Times-Picayune, "The announcement marks a major turning point for the region's economic recovery," with plans to spend $2 billion and provide 2,000 related jobs. Neighborhood preservation groups are concerned that development plans are proceeding before a determination of what will happen to existing medical facilities that will be closed (Moran, New Orleans Times-Picayune, 11/23).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.