Louisiana's public hospital system is on the verge of financial collapse two months after Hurricane Katrina and needs federal aid quickly, the head of the system said. The Louisiana State University Heath Care Services Division needs $15 million a month for the next six months to meet its payroll and $200 million in interim financial support for seven of its nine hospitals that have taken on additional patients because of the closures of its Charity and University hospitals in New Orleans, said Donald Smithburg, the system's chief executive officer.
Smithburg said the system, Louisiana's largest healthcare 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.
To avoid closing its remaining seven hospitals, Smithburg said the system is also trying to obtain deficit spending authority from the state Legislature, which is scheduled to meet in a special session to address Katrina issues next week.
Because those seven hospitals were not directly damaged by either Katrina or Hurricane Rita, they are not eligible for grants from the Federal Emergency Management Agency.