Public hospital system on verge of financial collapse
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Two months after Hurricane Katrina, Louisiana's public hospital system is on the verge of financial collapse unless federal aid is forthcoming quickly, the head of the system said Thursday.
"We're out of money, roughly after Thanksgiving," said Donald Smithburg, chief executive of the LSU Health Care Services Division told reporters. "We are running out of time."
Smithburg said the system, Louisiana's largest health care provider with 1.2 million patients annually before the storm, will have to furlough 2,900 of its 8,000 employees next week, the first step toward permanent layoffs on Dec. 17.
Two of the system's nine hospitals, Charity and University in New Orleans, have been closed since they were severely damaged in the storm. They are the system's two biggest hospitals and include one of only two trauma care units in the state.
Hospital system engineers have declared both Charity and University a total loss, but Smithburg said the system is awaiting a final decision from the Federal Emergency Management Agency on whether the two facilities will qualify under federal disaster law for full federal funding of replacements, about $750 million.
