By Anne L. Kim, CQ Staff
December 3, 2009 -- A federal grant intended to boost primary care services for residents of the New Orleans region in the aftermath of Hurricane Katrina has proved successful, especially for low-income and uninsured patients, witnesses told a House panel Thursday. But with funding for the grant slated to end in September 2010, the future of the clinics that provide these services could be in jeopardy, witnesses said.
Under the three-year, $100 million grant, many low-income and uninsured people, who previously sought treatment from hospital emergency rooms, received treatment from primary care clinics. But with a shortfall in funding for primary care services expected when the grant ends, the region's health care system could fall back to what it was before Hurricane Katrina, witnesses said at the House Oversight and Government Reform hearing on the New Orleans region's post-Katrina health care system.
"I'm not really sure that anyone is able to identify how we are going to keep this going," said Roxane A. Townsend, Louisiana State University Health Systems' assistant vice president for health systems.
The grant's end is anticipated to cause a $30 million shortfall, said Cynthia A. Bascetta, director of health care for the Government Accountability Office.
The Primary Care Access and Stabilization Grant has distributed, as of June 2009, $80 million to clinics which together provide care to more than 160,000 patients in the region, nearly half of them uninsured, said committee Chairman Edolphus Towns, D-N.Y.
Karen B. DeSalvo, executive director of Tulane University Community Health Centers, said in her written statement that most of the health centers' patients are the working poor who don't have insurance — few Louisiana businesses provide medical insurance—and do not qualify for Medicaid in the state.
"That's where the rubber hits the road in terms of sustainability," Bascetta said about the higher-than-average uninsured rate in New Orleans and its effect on the clinics' outlook for future sustainability.
Anticipating a shortfall in funding, Tulane's community clinics have worked to improve efficiency and have looked to other organizations to share best practices, but that can only go so far—the gap will need to be filled, DeSalvo said.
Other administrators of institutions that received grant money who testified at the hearing said they have looked to the philanthropic community and fundraising efforts and have started to require patient payments on a sliding scale.
But with 72 percent of his patients uninsured, it will be difficult to find a replacement for these funds until an expansion of Medicaid eligibility, said Donald T. Erwin, CEO of the St. Thomas Community Health Center.
He later said that he hopes for a potential expanded eligibility for Medicaid recipients in Louisiana, but that such an expansion would be two years away.
"We really are gaining stability, but we're still pretty fragile," Townsend said, describing a comment from a local doctor.
And although Hurricane Katrina occurred years ago, the health care infrastructure, which was especially hard-hit, has not fully recovered, said the committee's ranking Republican, Darrell Issa of California.
"Hospitals remain shuttered. Physicians remain in short supply," Issa said in his opening statement.
Towns said that the region's public hospital, Charity Hospital—which particularly served the working poor and uninsured—was destroyed during by the flooding and has not yet been rebuilt, Towns said.
Bascetta urged the committee to move quickly to decide whether to continue to the grant; otherwise, she said, providers will start to worry about job security and patients will start to become anxious.
DeSalvo also suggested allowing more flexibility in other funding sources to be redirected not just to hospitals but also to community-based centers.