New Orleans-Area Hospitals Lost $386M From 2005 To 2007, Execs Will Lobby For Stalled $350M Funding Package

Main Category: Public Health
Article Date: 24 Jul 2008 - 7:00 PDT

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The five major hospitals in the New Orleans area lost a combined $386.8 million between 2005 and 2007 and are expected to continue facing economic troubles, according to a Government Accountability Office report released on Friday, the New Orleans Times-Picayune reports. The study was requested by the House Energy and Commerce Committee after hospital executives testified last year that they could not sustain operations for much longer at current funding levels.

Losses for the hospitals were $212.5 million in 2005, the year of Hurricane Katrina, compared with $28.7 million in 2006, when some hospitals struggled to reopen, and $145.6 million in 2007. Losses for 2008 are projected to be about $103 million. However, according to the Times-Picayune, losses are being offset in part by hospitals using their assets to pay for operation costs. "We've been living off our savings accounts, assets that we've saved over the years," Lawrence Van Hoose, senior vice president of Ochsner Health System, said. He added, "We can't continue to do that."

The losses are due, in part, to higher salaries paid to certain personnel because of a shortage of nurses and physicians, according to GAO.

Hospital executives said they hope the GAO report will convince lawmakers to approve a stalled $350 million funding package for hospitals in Louisiana and Mississippi. The Senate included the package in an emergency war spending bill passed last month, but the funding was removed after negotiations between House leaders and the Bush administration. The package would provide $135 million total for the five New Orleans-area facilities.

None of the hospitals would discuss potential cutbacks that would be made if the financing is not made available (Alpert, New Orleans Times-Picayune, 7/19).

The GAO report is available online (.pdf).

Lawmakers' Visit
At a news conference on Sunday, federal lawmakers touring the area said New Orleans and St. Bernard Parish, in particular, would struggle to provide care in the long term if funding for the medical centers is not forthcoming. Rep. Sheila Jackson Lee (D-Texas) said, "A city like this cannot be without a major trauma hospital" (Carr, New Orleans Times-Picayune, 7/21).

The delegation also visited a Louisiana State University community health clinic. Clayton Williams -- director of health systems development for the Louisiana Public Health Institute, which operates 70 sites that provide primary care to low-income people -- said a $100 million grant helped launch the centers, but the Office of Management and Budget prohibited the money from being used to improve health technology. Rep. Jim Clyburn (D-S.C.) said a new provision is being considered to finance health technology improvements (Hammer, New Orleans Times-Picayune, 7/22).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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