Patching New Orleans

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It is a bright May afternoon in south Louisiana, and a moist breeze is drifting through downtown New Orleans. Spring heat usually arrives without much drama in this place, where winters are mild and spring is a brief interlude before the first breaths of summer waft in from the Gulf of Mexico.

But the May breeze also carries an unsettling reminder: The tropics are reawakening, and the reprieve is almost over. In the months since Hurricane Katrina turned America’s most exotic city into its most devastated, the area’s healthcare providers have worked to restore a shattered healthcare system—even if they are unsure of what they are rebuilding or for whom they are rebuilding it.

On this humid afternoon, the rebuilding process feels more like mere survival at the Medical Center of Louisiana Emergency Services Unit. The setting is no gleaming medical office. Here, as many as 200 patients a day wait on small plastic chairs in a corner of the former Lord & Taylor department store for precious time with a physician. Clinicians see patients in doorless “rooms” framed by temporary cubicle walls. In a former merchandise loading dock, patients undergo CT scans in a trailer. Upstairs is dental care, a steep walk up the long-silent escalator.

Though the conditions seem primitive, the clinic run by Louisiana State University’s charity hospital system represents progress. Healthcare in New Orleans has evolved from the triage in parking lots immediately following Katrina. Last September, the unit opened in MASH-style tents in the Ernest N. Morial Convention Center after Katrina roared through the city and flooded LSU’s Charity Hospital and University Hospital, the two still-shuttered campuses that form the Medical Center of Louisiana at New Orleans. When the convention center needed its space back in March, MCLNO’s emergency services unit moved to the vacant Lord & Taylor building across from the Louisiana Superdome.

The unit treats about half of Charity and University’s combined pre-hurricane volume. Staffing and limited technology are significant concerns. And the unit is designed to treat only minor medical emergencies, so some patients must be stabilized and transferred to the few hospitals that are open. Still, the facility represents a small step forward. The city’s providers have learned to appreciate such small steps. As Katrina’s one-year anniversary approaches, the New Orleans healthcare community has only begun to unravel a monumental challenge that will take not months, but years to overcome.

“Overall, the country doesn’t get what we are going through,” says Jim Montgomery, president and CEO of Tulane University Hospital and Clinic, which partially opened in February after flooding had shuttered the facility. “The infrastructure was totally ripped asunder. You can say this for this community, this state and any individual organization: It is like a huge jigsaw pule that is torn apart with thousands of pieces, and you have to pick up every one and put it back together.”

The uninsured migration

Katrina did not destroy one healthcare system in New Orleans. It destroyed both of them. Unlike the other 49 states, Louisiana maintains a system of public hospitals to care for the indigent. Before Katrina, 10 acute-care hospitals operated in New Orleans, but it was Charity and University, part of the LSU Health Care Services Division’s statewide network of charity hospitals, that cared for the majority of the poor. Louisiana distributes Medicaid Disproportionate Share payments totaling roughly $900 million to public hospitals—including roughly $300 million to MCLNO—to care for the state’s 850,000 uninsured residents, MCLNO CEO Dwayne Thomas, M.D., says.

Charity and University shut down after at least 12 feet of water flooded each facility’s basement and damaged nearly every system in the hospitals. Repairs to University, including the roof, windows, plumbing and electrical system, continue to progress, and Thomas says the hospital is aiming for an October opening. Charity Hospital leased space to reopen its trauma center in neighboring Jefferson Parish, and MCLNO is operating small primary-care and subspecialty clinics along with the former Lord & Taylor emergency services unit. But the main Charity facility may have seen its last patient. “There are currently no plans to utilize the Charity Hospital campus for any hospital use whatsoever,” Thomas says. “I do not believe that we will ever use Charity Hospital as a hospital again.”

With the city’s public hospitals down, the burden now falls to the city’s private hospitals. But the state’s Medicaid Disproportionate Share payment system has historically left little funding for charity care delivered at private facilities. Additionally, physicians providing charity services only receive compensation if they are affiliated with a public hospital, according to PricewaterhouseCoopers’ Report on Louisiana Healthcare Delivery and Financing System.

Touro Infirmary was the first Orleans Parish acute-care hospital to offer any form of post-Katrina care when it opened emergency services nearly a month after the storm. The nonprofit hospital gradually relaunched sections of the facility and now offers full services. Touro’s uncompensated care has risen from 5 percent of gross charges before Katrina to 12 percent in 2006, says President and CEO Leslie D. Hirsch, who calls the number of people in the city without insurance “staggering.”

“This year we’re tracking, if it keeps going the way it is, to have $25 million to $30 million of uncompensated care, which is unsustainable for us over the short and long haul,” he says.

Leaders from the other three acute-care hospitals open in the city—Tulane and Children’s Hospital in Orleans Parish and Ochsner Medical Center just across the line in Jefferson Parish—tell a similar story of spiraling charity care without increased reimbursements. Ochsner Health System, which includes the medical center and multiple clinics throughout southeast Louisiana, sustained a $70 million operating loss in 2005—after a predicted $8 million pre-Katrina profit—largely due to uncompensated care patients, says Warner Thomas, president and chief operating officer. At Tulane, which is owned by Nashville, Tenn.-based HCA Inc. and still had only 100 of its 235 beds open in May, Montgomery says indigent care tops 20 percent of care on any given day—and sometimes approaches 30 percent.

With many businesses in the city closed and former employees losing their health insurance, Hirsch worries that a shrinking base of insured patients could hinder more than just the healthcare industry’s recovery. If prices for paying patients rise, he says, businesses could find healthcare unaffordable and pass those higher costs to their employees. “Their employees will say, ‘Hey, I don’t need to work in this market. If I have to pay for healthcare, I can go to Mississippi or Alabama and not have to pay as much and have a much better lifestyle,’” Hirsch says. “It’s definitely an underpinning issue for the economic viability of the area.”

MCLNO’s Thomas recognizes the challenges created for other providers after Charity and University closed. “The very viability of the private hospital sector really depends on whether we return,” he says. “If we don’t return, their economic viability will be threatened unless there is an increase in the amount of money in the uncompensated care pool that is paid at a higher rate than what it currently is and includes physician fees.”

Hospitals could realize at least a little of that financial relief soon. The Louisiana Legislature’s state operating budget for the 12 months that began in July includes $120 million for uncompensated care at community hospitals. The budget also includes a $38 million Medicaid rate increase for community hospitals and an $18 million Medicaid rate hike for physicians, according to the Louisiana Hospital Association. Hospitals in Orleans and Jefferson parishes, along with facilities in two other southwest Louisiana parishes affected by Hurricane Rita, will receive payments at a higher rate than hospitals in the rest of the state, according to the LHA.

“The very fact that the Legislature has acknowledged the existence of the problem is a win for the hospital industry. As far as the amount of money, it will not address the entire problem,” Hirsch says. “Hopefully it will be built upon as time goes on.”

Still more assistance could be on the way if a proposed joint venture between LSU, Tulane Medical School and the federal Department of Veterans Affairs to build a new complex to treat uninsured patients and train medical students comes to fruition. University Hospital’s planned reopening this fall would further lessen private facilities’ uncompensated care burden. But even if the joint-venture project clears every necessary governmental hurdle and secures sufficient federal and state funding, Hirsch notes, completion would be years down the road.

Help wanted

Healthcare organizations usually don’t view the fast-food restaurant down the street as a threat to lure potential employees. But in a smaller post-Katrina New Orleans, hospital recruiters are vying not just with one another, but with McDonald’s and Pia Hut and even the corner gas station.

Measuring the city’s population has proved difficult with people constantly flowing in and out. The U.S. Census Bureau in June estimated roughly 158,000 people, but that number was for Jan. 1. Other analysts put the number at 200,000, but nearly every estimate agrees the city’s population remains no more than half of the Census Bureau’s pre-hurricane estimate of 437,186.

With fewer workers to go around, wages have jumped and hiring competition has intensified. “Our labor costs are really a concern. We’ve had to raise our rates generally, because in a marketplace where fast-food restaurants are paying $10 an hour and giving a $6,000 sign-on bonus, it’s affected the work force,” Hirsch says, adding that Touro’s total staff in May stood at 1,300 people compared to 1,600 before the storm.

Other facilities offer similar numbers. Ochsner Health System lost 1,800 of its 7,000 employees, Warner Thomas says, though the organization has rehired 1,400. Lynn Witherspoon, M.D., vice president and chief information officer at Ochsner, lost nearly half of his 25-person crew answering the 2 million calls received annually at the medical center’s central switchboard. “We pay Burger King wages, but the job is a heck of a lot more challenging,” he says.

Scaled-back Tulane has less than half of the 2,600-person staff it employed before Katrina, Montgomery says. At Children’s Hospital, a pre-hurricane staff of 1,700 stood at 1,250 in May, but Cindy Nuesslein, vice president of hospital operations, says her facility’s employee base has nearly “right-sized” with the city’s reduced population.

“Where we were the day before the storm and where we are today are two different sizes of facility and community,” Nuesslein says. “We’re running about 75 percent of where we were, and we have about 75 percent of our staff, so things are really OK.”

The 143-staffed-bed nonprofit hospital has not been immune to staffing troubles, however. Children’s was the first Orleans Parish hospital to completely reopen in October 2005 after Touro had opened its emergency department roughly two weeks earlier. Even after the facility opened its doors, leaders discovered that some displaced employees were willing to return, but were unable to do so because their children were enrolled in new schools or they had taken new jobs.

“It was incredibly difficult initially to get housekeepers and dietary workers and that sort of staff back. Unfortunately, where the storm hit, it impacted a disproportionate share of the housing for those individuals,” Nuesslein says.

A housing shortage continues to hinder providers’ staffing efforts throughout New Orleans. Fifty Federal Emergency Management Agency trailers sit adjacent to Children’s Hospital, mostly housing Children’s employees. The facility also has set up some temporary apartments for some of its staff, and still more employees are in FEMA housing throughout the city. Some 60 FEMA “cottages” are situated near Tulane’s downtown hospital, Montgomery says.

But there are not nearly enough houses, temporary or permanent, to go around. At Ochsner, where approximately 75 percent of staff members lost their homes, Thomas says housing often is the largest deterrent for former employees who want to return. “People call and ask, ‘Is everything back to normal in New Orleans?’ But we had 150,000 houses destroyed. It does not get rebuilt in nine months. We are dealing with something that is unprecedented in magnitude,” he says.

Although finding cafeteria or housekeeping workers has been a challenge, filling support positions is only part of a larger recruitment problem. New Orleans hospitals have struggled to replace clinicians dispersed to other regions. Tulane lost roughly a third of its physician staff, Montgomery says—some to other cities, others to other area hospitals. Ochsner initially lost 80 displaced physicians; the system has rehired about 60.

“We faced a moment of truth post-Katrina,” says Ochsner CEO Patrick Quinlan, M.D. “Folks just had to move on. We replaced them, which I think says a lot about the strength of the organization and the environment.”

Nowhere is the problem more pronounced that at MCLNO, which has former clinicians “spread all over the place” from its two shuttered hospitals, Thomas says. The CEO believes the charity system’s nursing and professional staff are “mission-oriented” people who “believe they have a responsibility to the community,” so when University Hospital reopens, many of those clinicians will eventually come back. But the slow pace of recovery could discourage some physicians who don’t want to put their careers on hold amid subpar conditions and a steady wave of uncertainty.

“How can you recruit? I mean, let’s be real. Our program did well because we’re emergency physicians, that’s what we do,” says Jennifer Avegno, M.D., an instructor with the LSU department of emergency medicine and a physician at MCLNO’s emergency services unit. “We can work in a tent. We can work in a department store. But a lot of other programs can’t recruit to a department store.”

Most New Orleans healthcare leaders are hoping the summer months bring more people back to the city. Even if the number of returning workers surges, however, the housing issue will remain. Ubiquitous construction and a jump in new housing permits represent positive signs of rebuilding. But with enough work to keep area roofers, electricians and plumbers busy for years, the pace likely will continue to crawl.

Yes, it could happen again

If New Orleans’ levees hadn’t failed, Katrina would have been mostly remembered for its windblown devastation along the Mississippi Gulf Coast. As the 2006 hurricane season nears its peak, the U.S. Army Corps of Engineers is mostly balking on whether the patched-up levees can hold the waters back if another hurricane strikes the city.

“It is hurricane season again. We are all worried about the same things again—availability of staff, evacuation issues, infrastructure collapse, security,” says Mel Lagarde, president of HCA’s Delta Division and co-chair of the Bring New Orleans Back Commission. “It seems like we just dealt with them.”

Montgomery is more blunt: “God forbid that it ever flooded, because what that would do to the city would be beyond thinking.”

Many hospital leaders say they’ve learned from the Katrina experience and feel better prepared to handle another storm. One recurring theme is that seemingly small details matter. Before Katrina struck, every department at Children’s Hospital, for instance, had a staff list with phone numbers and addresses. But the contact information was for the employees’ homes—useless when searching for workers dispersed to other cities. The lists now include cell numbers and other information to help the hospital locate evacuated staff members more easily, Nuesslein says.

Children’s is also adding a satellite phone system and drilling its own backup well in case the city’s water supply becomes nonexistent—an issue during Katrina’s aftermath. Some hospital employees returned roughly three weeks before the facility eventually opened, but there was no potable water supply at that point, Nuesslein says.

Beyond specific details such as adding more portable generators or accessing diesel fuel, Katrina taught New Orleans hospitals a lesson in preparation that providers nationwide can apply to their disaster plans, MCLNO’s Thomas says. “You go back to the very, very basic things: food, water, sanitation.”

From a management perspective, senior leaders must understand their roles and maintain clear lines of communication, Montgomery says. “Communicate, communicate, communicate with your people. We met with department managers twice a day. We met with physicians once a day.”

Nuesslein echoes that assessment. “Communication is absolutely the most critical part” of disaster management, she says, along with remembering minor details—“like making sure you have places for people to go to the bathroom.”

The long road back

At the former Lord & Taylor department store, Avegno and her fellow clinicians continue the daily struggle to meet patients’ needs. The emergency services unit can handle most of the day-to-day minor traumas that wander through the door, but follow-up care is another story. With so much construction throughout the city, for example, the unit sees many orthopedic injuries that the clinic’s physicians can stabilize—but that’s it.

“Finding them follow-up care for their fractures or their orthopedic issues is unbelievably difficult,” Avegno says. Most of the time the unit sends patients as far away as Baton Rouge—80 miles from New Orleans—in search of an appointment.

Despite the clinical limitations, staffing shortages and countless other frustrations, however, the most pervasive problem at the unit—and in the entire New Orleans healthcare community—may be one of psychological burnout.

“It’s been harder in the last few months than it was initially, once the Katrina fatigue sets in,” Avegno says. “We have physicians who say, ‘It was all exciting after the storm when we were working in tents, but now where are we going?’ There’s a real sense of, ‘How long is this going to continue?’”

“How long?” may be the biggest question of all. The hospitals that have reopened have made progress, but the ongoing recovery can be draining. Across town from the emergency services unit, Ochsner is “turning the corner on economics,” Thomas says, adding that the system “can pay the salaries we need to pay to keep nurses and doctors.” Still, motivating people for the long haul is challenging. “We won’t come back in a quarter or a year. Rebuilding will be a multi-year process,” he says.

Determining which parts of the healthcare system actually require rebuilding has been a point of contention. The PricewaterhouseCoopers report released in April asserts that New Orleans’ private sector was overbedded before Katrina and that the storm “right-sized” the region. Before the hurricane, the metro area’s 4,350 available acute-care hospital beds averaged a 56 percent occupancy rate, according to the report. The city’s current bed count is roughly half of pre-hurricane levels, but adjusting for population changes and targeting a nationwide average bed utilization of 75 percent “leaves ample numbers of hospital beds under the current repopulation scenarios,” the report says.

The uncertain future of some of the city’s other closed hospitals further complicates the bed count equation. In June, Dallas-based Tenet Healthcare Corp. announced it was selling its two New Orleans hospitals, Memorial Medical Center and Lindy Boggs Medical Center, along with two other metro New Orleans facilities. Lindy Boggs, which had a reported 27 patient deaths during Katrina’s immediate aftermath, has no current plans to open. Ochsner announced in July that it is buying Memorial, where 34 deaths occurred, along with the two other metro New Orleans facilities. Although two Memorial medical office buildings are open, the timing of any large-scale reopening remains uncertain.

Some providers concede the right-sizing premise in part, but say the issue is more complicated than that. “Before the storm, our market had too many beds. Now, basically we’re more right-sized. But as, say, New Orleans East comes back, it may not be that Touro is the best hospital in terms of its proximity for the people in the east to come to, even though in gross terms we may have enough hospital beds,” Hirsch says.

How many beds the city really needs will depend, of course, on the number of residents who ultimately return. A March RAND Corporation study, The Repopulation of New Orleans after Hurricane Katrina, estimates a September 2008 population of 272,000. Other projections put the 2008 total at around 300,000. In any event, those estimates don’t account for the surrounding parishes—each with their own hospitals—that have always composed a large portion of the metro population and helped fuel the economy. The Census Bureau found 915,000 residents in seven New Orleans-area parishes as of January—down from 1.3 million before Katrina.

The nature of the returning population may prove as important as the size, Montgomery says. “Under what basis will the population re-establish itself? Is it a basis of fully employed, well-insured individuals who move to the city where economic development can be enhanced? Or is it going to be an indigent, unemployed facet to the city that does not stimulate the economy? I don’t think there is any way to tell.”

Despite the daunting scope of the recovery, much of the healthcare community remains committed to the city’s future. Karen DeSalvo, M.D., splits her time as chief of the division of general internal medicine and geriatrics at Tulane University Health Sciences Center and a member of a healthcare group formulating a long-term reform plan for care delivery. DeSalvo has logged nearly 100-hour work weeks since Katrina struck, but she refuses to leave New Orleans. “We are dealing with the unknown and the tenuous. But it is also very exciting. We are trying to reinvent a city, our medical school, personal careers, social circles and an education system,” she says. “We are living history, and I cannot possibly walk away.”

Ultimately, the New Orleans healthcare system is tied to an overall economic recovery that hinges on whether a work force returns to support vital industries like tourism, Dwayne Thomas says. Without hotel employees, taxi drivers, bus boys or the countless other workers who drive the city’s economy, he contends, the Crescent City may never be the same.

“If we are not successful in having tourism and several other industries return to this area,” he says, “New Orleans will be a quaint little village where people come to visit and say, ‘Oh, look at the French Quarter and the architecture of Uptown. What a wonderful place—surrounded by swampland.’”

Editor Jim Molpus and Technology Editor Gary Baldwin contributed to this story. Jay Moore is managing editor of HealthLeaders. He can be reached at

Rethinking Care Delivery

Call it healthcare on the fly. Or maybe on the edge. Ten days after Katrina jolted New Orleans, physicians at Tulane University cobbled together a makeshift clinic that is a little of both. Situated in Covenant House, a homeless shelter for adolescents on the edge of the French Quarter, the clinic has been a source of primary care for hundreds of adults upended by the storm. And while its backers acknowledge they are practicing bare bones medicine, they also say Covenant House represents a care delivery model that New Orleans should embrace to serve its many indigent residents.

Staffed by Tulane residents, Covenant House clinic offers adult primary care, with psychiatry and neurology specialists available. It was funded by a donation of $400,000 from drug giant Johnson & Johnson, with the U.S. military also donating many medical supplies. In the storm’s immediate aftermath, the clinic treated nearly 200 patients a day, recalls Eboni Price, M.D., the associate program director for house staff at Tulane who doubles as clinic director. Since the beginning of the year, the patient volume has slowed to about 35 daily patients—homeless and newly uninsured among them, Price says. They are treated by four Tulane residents who staff the clinic. Support services are minimal, as the clinic has no nurses and only three administrative staff. All services are free, but that may change, according to Price.

“We have learned to be creative and cut costs,” she says. “Before Katrina, there had been a large dependence on lab work at Charity Hospital that was done at the state’s expense. But there is a lot you can do for a patient without blood work. We have prioritized who really needs blood work.” With the Johnson & Johnson money, the clinic purchased exam tables and various scopes for exams.

Katrina may have been the shock that New Orleans needed to rethink not just its levee system, but healthcare delivery, Price says. “Instead of having people come downtown for care, we need to establish clinics in the neighborhoods,” she says. “We need community health centers that include behavioral and mental health services. Before the storm, we had the mentality that the mind was separate from the body. Now we cannot ignore that every site should have mental health services.”

—Gary Baldwin

A Technology Wake-up Call

Hurricane Katrina demonstrated in dramatic fashion a point that healthcare IT proponents have been trying to make for years: Paper records are risky business. Even for the highly automated Ochsner Medical Center, the August 2005 storm served as a wake-up call. While the facility has long been a front-runner with a comprehensive, homegrown electronic medical record system, it did not completely abandon its reliance on the paper chart until the storm. “We had all the electronic tools in place before Katrina—data collection, medication management, orders and charge capture,” says Lynn Witherspoon, M.D., senior vice president and chief information officer. “The physicians were using bits and pieces of the system. But we still had a small percentage using paper charts.”

In the days immediately after the storm, many Ochsner patients—and physicians—were displaced to Baton Rouge. There, physicians could look up patients’ medical records online as the Ochsner system’s wide area network remained intact. But even after staff clinicians trickled back to work in New Orleans, they faced another, more practical dilemma that upended their old paper record habits. Like other New Orleans’ hospitals, Ochnser had many staff members--particularly those in lower-paying jobs--whose homes were destroyed. “We lost 80 percent of our HIM staff,” Witherspoon explains. “We literally could not pull paper charts. Many of our other charts were stored off-site and were not accessible. Katrina was the tipping point that said we can no longer support movement of the paper chart.”

Even for hospitals lacking EMRs, IT played a big role in business operations. Children’s Hospital was able to process its payroll because its Siemens financial information system is hosted remotely in Philadelphia by the vendor. Its financial data safely tucked away on Siemens’ servers, Children’s set up a T1 line from a Baton Rouge satellite to activate the transaction, recalls Greg Feirn, chief financial officer. Children’s ran its operation from Baton Rouge for more than a month before its New Orleans facility reopened in October. Because most of the staff was on direct deposit, Children’s employees were able to sustain a normal cash flow. “We knew our employees needed their checks more than ever,” says Feirn.

Both Ochsner and Children’s are revamping their IT strategies as a result of Katrina. In addition, Ochsner has added new power to its EMR arsenal. An order entry and results reconciliation component was launched in May—an event that Witherspoon says drew a round of applause from 70 physician department leaders. In addition, Ochsner has added a Web-based physician portal, which supplants the cumbersome VPN arrangement that enabled remote access. An Internet connection is all physicians need to access their charts, Witherspoon says. “Their workload has gone up, and it is hard for many of them to finish their charts during the day,” he says. “So they finish at home.”

For its part, Children’s is reassessing its lack of electronic clinical records, Feirn says. Improving the hospital’s clinical data repository so that it’s remotely accessible will likely be the first project. In March, Children’s deployed a picture-archiving and communications system, which has been well-received, Feirn says.

Katrina also precipitated an electronic data-sharing project that could benefit the region. Initially spurned by the federal government, a proposal for a Louisiana Health Information Exchange was bankrolled for $3.7 million after the storm, says Witherspoon. Major participants in the New Orleans area will include Ochsner, LSU, and Blue Cross and Blue Shield of Louisiana. “The storm helped push the grant,” Witherspoon says. “It created a ‘special circumstance.’”

—Gary Baldwin




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