Hospitals That Braved Katrina Face Bankruptcy

Only three hospitals — all non-profits — who were in Hurricane Katrina's direct path stayed open during the storm. Now they are facing bankruptcy, and seeking help from federal authorities.

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This is WEEKEND EDITION from NPR News. I'm Scott Simon.

In the wake of Rita's landfall on the Texas-Louisiana border, we'll be looking at financial losses from that storm and Hurricane Katrina.

But, first, just three of the 16 hospitals in the New Orleans area managed to stay open through Hurricane Katrina. They are all non-profits. They work round-the-clock to care for their patients and now they say they need help. But finding it has not been easy. NPR's Snigdha Prakash reports.

SNIGDHA PRAKASH reporting:

Mark Peters is chairman of East Jefferson General Hospital in Metairie, just outside New Orleans. His hospital ran up a tab of about $12 million for care given during Katrina. He sounded like a desperate man when he spoke from his office about a week after the storm. He was looking for money.

Mr. MARK PETERS (Chairman, East Jefferson General Hospital): We're talking to FEMA; we're talking to the state; we're talking to Medicare; we're talking to the federal Department of Health and Human Services; we're talking to our managed care payers. We're talking to anybody that has some control over funds.

PRAKASH: Because of the way hospitals are paid, East Jefferson ran a loss on its patients for every extra day it sheltered them during the storm. Insurers don't pay for the extra fuel, food and round-the-clock staff who stayed to care for patients. Nor can insurers make up for the $1/2 million East Jefferson has been losing every day since the storm. The other two hospitals that functioned during the storm, West Jefferson Medical Center and the Ochsner Clinic, face similar dilemmas.

Mr. GARY BERRY (CEO, Blue Cross & Blue Shield of Louisiana): They've been hit twice.

PRAKASH: Gary Berry(ph) is CEO of Blue Cross & Blue Shield of Louisiana, the state's largest insurer.

Mr. BERRY: The first hit during the emergency and now they are still facing all their--pretty much all their normal operating costs and they're only reaching about a 30 percent occupancy. The question is: Who's going to be able to pay the costs that those hospitals are incurring until things can return to some new state of normal?

PRAKASH: FEMA's money is meant to repair physical damage to buildings and infrastructure. These hospitals, whose buildings are mostly intact, don't qualify for that help. Early this week the CEOs of the three hospitals came to Washington to explain to anyone who would listen that even as New Orleans struggles to rebuild, three hospitals that Katrina couldn't close may soon have to start shedding staff because they're simply running out of money to pay their bills. By Wednesday afternoon, the three CEOs had met with most of Louisiana's congressional delegation. Gary Muller is CEO of West Jefferson Medical Center and spoke outside the Senate Hart Building where Louisiana Republican David Vitter has an office.

Mr. GARY MULLER (CEO, West Jefferson Medical Center): The meeting we just came out of with Senator Vitter and the three hospital CEOs was very good. At this point, our delegation from Louisiana is very aware of the extreme urgency of our situation, to keep the infrastructure in health care up and build the economy around health care for the future.

PRAKASH: The CEOs then headed to the White House. On Thursday morning, Mark Peters of East Jefferson made an emotional plea for help at a House hearing. He told congressmen three hospitals are left standing in the New Orleans area. `We're it.'

Mr. PETERS: We three have been here this week talking to many different officials, making certain that everyone is aware of our current financial plight, as we continue to try to serve the community. It's a real issue. It's an immediate issue within the next seven to 10 days. Can you imagine sitting in my chair talking to somebody who's worked through this storm, worked hard, worked double shifts, worried about their home, and I may have to tell them, `We don't have enough business. I need to send you home'?

PRAKASH: The three CEOs flew out of Washington late Thursday as Hurricane Rita was threatening the Gulf Coast. Lobbyists working with them said the CEOs had made some powerful new friends in the Senate who are trying to help quickly. Snigdha Prakash, NPR News, Washington.

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