Published in the Greater New Orleans Living Magazine and Television
March 2008
Link to original article

Dr. Mark Peters, the CEO of East Jefferson General Hospital, senses some fatigue in the New Orleans community regarding health-care issues. “People are probably tired of hearing about the city’s healthcare problems,” he says, “but they haven’t been adequately addressed yet.” As a former head of the Metropolitan Hospital Council (2006–2007), a current member of the board of the Louisiana Hospital Association, and someone who frequently meets with the leaders of other New Orleans hospitals, Peters has a far-reaching perspective of the challenges facing the regional health-care system.

In the earlier part of his career, however, his approach to medicine was more hands-on. Originally from Ohio, Peters received his medical degree from Ohio State University and practiced family medicine in his home state for 17 years. He decided to branch into broader responsibilities and made the career change to administrative work. Metairie’s East Jefferson General Hospital (EJGH) tapped Peters to be its medical director in 2000, and he became CEO of the hospital in 2002.

How do you view the present health-care situation in the New Orleans area?
I’d like to start out by saying that regional health-care providers continue to work very hard in a challenging post-Katrina environment. That said, there’s a lot of instability in the health-care system.

Physicians are stressed about their reimbursements. Medicare and insurance companies reimburse New Orleans doctors less than they do doctors in other areas. Because they can make more elsewhere, our area has a problem with attracting and retaining physicians.

Hospitals are facing serious fiscal challenges, as well. I’m concerned about what will happen if we don’t get federal relief soon to temper financial losses. Health-care organizations will ask themselves if they can continue providing all their services. And if they have to cut services, it will exacerbate other issues.

Is the problem that hospitals need to provide expensive emergency room care to the uninsured who can’t afford regular medical care?
With Charity closed, the emergency room problem has become a hardship on both hospitals and physicians. But that’s just one component of many factors.

What are other problems?
Well, one important topic that isn’t often discussed is how inadequate traditional Medicare payments are. Each hospital gets paid according to a Medicare wage index, but the Medicare payment schedule is not uniform around the country. If a Medicare patient is admitted with pneumonia to a New York hospital, that hospital will be paid more than if a New Orleans hospital saw the same patient. It’s because New York is a more expensive place and hospitals’ costs are higher there.

The problem is that the Medicare system uses three-year-old data. The data in use for New Orleans is pre-Katrina and doesn’t reflect the marketplace anymore. Local hospitals’ expenses have skyrocketed. We have higher insurance and utility bills. Primarily, however, our payroll costs for nurses, housekeepers, and all other staff members have gone way up.

The situation is so off-kilter that every time a Medicare patient is admitted to a local hospital, the hospital loses money. And the Medicare index won’t change until 2009.

How is this problem playing out in area hospitals?
The most telling statistic can be found by looking at the five main systems, which handle 95 percent of all New Orleans–area hospital patients — EJGH, West Jefferson, Touro, Ochsner and Tulane. In the first five months of 2005, these hospitals had a combined profit of $12 million. In the first five months of 2007, they had a combined loss of $58 million. These losses are being paid out of savings, which are running out.

 Has there been any relief so far for hospitals?
The Louisiana legislature has been responsive and understanding, and hospitals have received some special appropriations for the uninsured. We’re all hoping to have long-term stability and funding. With the new administration in Baton Rouge, we’re continuing the dialogue.

What about the money that had been going to the Charity system? Can area hospitals tap into that resource?
Frankly, we’re not sure where the [Charity] money is going, if it’s going anywhere at all. If we could figure that out, it would help us to objectively discuss the problem.

In a previous issue of this magazine, we interviewed Gery Barry of BlueCross BlueShield Louisiana about his involvement with the Coalition of Leaders for Louisiana Healthcare. Are you involved with COLLAH?
I’m the chairman on the board of directors, in fact. COLLAH proposes a different way of providing and funding care in the state, focusing on the uninsured in New Orleans first. There is support to make broad reforms in our state. People want to increase access to health care and improve quality. However, all will be for naught if the system isn’t stabilized . . . if we’re worried about turning on the lights tomorrow.

Is there a light at the end of the tunnel?
Nothing is certain. It’s imperative for something to happen this year. People should realize how integral the health-care system is to the rebuilding of New Orleans. It’s a big driver of the economy.

In spite of the things I’ve said here, I’m optimistic. All hospital CEOs want reform. No one feels good about how things were before Katrina or the status quo now. We’re taking advantage of the opportunity to move forward.