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Linda Qiu
By Linda Qiu August 19, 2015

Some setbacks, but more progress

Nearly a decade after Hurricane Katrina flooded the floors of New Orleans' beloved public hospital, its $1.1 billion replacement has finally opened.

Katrina severely damaged Charity Hospital, an Art Deco building where the city's low-income and uninsured adults received treatment that's one of the oldest of its kind in the country. So in lieu of repairing Charity, its operator, Louisiana State University, proposed building a new facility. (The decision continues to rankle many today.)

That new facility and other developments have allowed Obama to keep the essence of his promise. But it hasn't all been smooth sailing; there have been several setbacks and challenges when it comes to rebuilding New Orleans hospitals.

After a four-year dispute with the Federal Emergency Management Agency over the costs, Louisiana received $475 million in federal funding for a new hospital in 2010 (the state received $933 million from FEMA to rebuild and repair hospitals across the Bayou State). Construction on the replacement, University Medical Center, began two years later, and the center opened on Aug. 1, 2015.

However, there is concern that the center will be underfunded, as it will cost $525 million to operate every year, and Gov. Bobby Jindal, a Republican presidential candidate, has rejected the Medicaid expansion that would have footed the bill for many of the state's poor.

Beyond the public facility, Obama also promised to rebuild the Department of Veterans Affairs hospital, to replace the one lost in Katrina and to withstand future storms. We reported in 2013 that the new hospital will better withstand floods, store enough fuel for a week, and collect rainwater in case the city supply is contaminated.

The construction, however, has been mired in disputes and repeated cost adjustments. The U.S. Government Accountability Office estimates construction on the hospital will take about 8.5 years to complete (a year and half longer than anticipated) at a cost just shy of $1 billion (a 60 percent increase from the initial estimates). The hospital is set to open in February 2016.

Other federal health care recovery efforts include repairing broken hospitals and giving doctors and nurses incentives to return to the region. We noted in 2013 that two arms of the executive branch  -- FEMA and the Department of Housing and Urban Development -- provided more than $1 billion in assistance to replace a facility in New Orleans East. The new hospital opened in July 2014.

Obama, however, fell short of providing incentives to lure medical professionals into the region. In 2007, during the presidency of George W. Bush, the Louisiana Department of Health and Hospitals received a $50 million federal grant to recruit and retain health care professionals in New Orleans, a spokeswoman from the department told us. But the Obama administration hasn't provided similar funding.

Overall, Obama largely stayed true to his word. We rate this a Promise Kept.

Editor's note: On the 10th anniversary of Hurricane Katrina, PolitiFact has partnered with The Lens to report on President Barack Obama's campaign promises about the storm's impact on New Orleans. The Lens is a nonprofit, public-interest newsroom that covers the New Orleans area.


Our Sources

Federal Emergency Management Agency, Louisiana — Hurricanes Katrina & Rita, July 30, 2015

New York Times, "Louisiana Wins Fight for Hospital", Jan. 27, 2010

New York Times, "New Orleans Hospital Is Replaced, With Hope of Preserving Its Mission," Aug. 1, 2015

University Medical Center, "University Medical Center Opens", Aug. 1, 2015

U.S. Government Accountability Office, "Additional Actions Needed to Decrease Delays and Lower Costs of Major Medical-Facility Projects", April 2013

Times-Picayune, "New Orleans East Hospital opens quietly, still seeking accreditation," July 24, 2014

Louis Jacobson
By Louis Jacobson January 14, 2013

Federal government is helping fund three hospital projects

Hurricane Katrina struck the Gulf Coast three and a half years before Barack Obama was sworn in as president, but the recovery lagged so much that Obama made several Katrina-related promises during his presidential candidacy in 2008.

One of the promises was to rebuild hospitals in New Orleans, including "a major medical complex in downtown New Orleans that will serve the entire community” and "a new, state-of-the-art Department of Veterans Affairs hospital."

First, some background. Before Katrina, Orleans Parish -- that is, the city of New Orleans -- had nine hospitals, and next-door Jefferson Parish had seven. A number of these facilities were private community hospitals largely serving residents with insurance. Charity Hospital, a large, Art Deco facility, served the city's poor -- nearly three-quarters were African American and 85 percent earned less than $20,000 a year. Half of the inpatient care at Charity was for patients without insurance, compared with 4 percent at other city hospitals.

Damage from Katrina closed Charity Hospital and most of the city's other hospitals, at least initially. (Only three, all in Jefferson Parish, operated through the storm and its aftermath.) One year after the storm, only three of nine Orleans Parish hospitals were serving patients, many of them with limited capacity. In the entire metropolitan area, the number of beds fell from 4,083 to 1,971 by July 2006.

Louisiana State University, which ran Charity, opened up a temporary emergency room, clinics and a trauma center -- but the hospital's permanent fate became subject to a legal dispute over whether to renovate or rebuild. The Federal Emergency Management Agency estimated that repairing the structure would cost $23.9 million, but the university countered that it would cost $257 million. This led the university to propose building a new facility rather than renovating the old one.

In January 2010, the dispute was resolved by an arbitration panel, which ruled that FEMA had to pay $475 million toward the full rebuilding of Charity. Construction began on a new facility in February of 2012.

The effort to rebuild Charity accounts for one element of the federal government's post-Katrina hospital recovery under Obama. There are at least two others.

One concerns the $110 million project to replace Pendleton Memorial Methodist Hospital in New Orleans East. In June 2012, the project received an $8.4 million FEMA hazard mitigation grant to ensure the structural safety of the hospital in the event of a natural disaster. Then, in October 2012, the Department of Housing and Urban Development said it would back a $97.6 million mortgage for the project. The facility is projected to open by the end of 2013.

The other federal effort aimed at supporting this promise concerns the rebuilding of a major VA hospital damaged by the hurricane. The facility is designed to be state-of-the-art, especially in its resilience in the face of a natural disaster. Critical infrastructure, including the emergency room, will be on the fourth floor so it can better survive a flood, while patient rooms will be flexible to accommodate more occupants in a pinch. The facility will store enough fuel for a full week and can collect over a million gallons of rainwater on site, in case the city supply is contaminated. It will have a securable perimeter in the event of "civil unrest or national emergency.”

Taken together, all of these actions amount to a Promise Kept.

Our Sources

Health Affairs, "Health Care In New Orleans Before And After Hurricane Katrina," August 2006

Alliance for Health Reform, "Rebuilding Louisiana"s Health Care System," July 2007

Hospitals & Health Networks, "Louisiana"s Second Chance," February 2007

The Nation, "Why Was New Orleans's Charity Hospital Allowed to Die?" April 27, 2011  

City of New Orleans, "Mayor Landrieu Announces Progress on New Orleans East Hospital," June 28, 2012

Healthcare Construction & Operations, "New Orleans" Hurricane-Proof VA Hospital," Aug. 08, 2012

New Orleans CityBusiness, "HUD backs city"s mortgage to build eastern New Orleans hospital," Oct. 1, 2012

New Orleans Times-Picayune, "Former LSU hospitals head takes Medicaid critique to national stage," Dec. 18, 2012

United States Civilian Board of Contract Appeals, decision in Charity Hospital case, Jan. 27, 2010

Humid Beings blog, "FEMA to award $474,750,898 to rebuild Charity Hospital," Jan. 27th, 2010, "After irate Sandy rhetoric, long funding process awaits," Jan. 5, 2012

Interview with Frederick P. Cerise, associate clinical professor of medicine at Louisiana State University and former head of LSU"s public hospitals, Jan. 11, 2013

Robert Farley
By Robert Farley September 1, 2009

Arbitration panel should end impasse over FEMA reimbursement for Charity Hospital

One of the more entrenched bureaucratic disputes following Hurricane Katrina has been over how much the federal government ought to pay to reimburse Louisiana for damage to the old Charity Hospital in New Orleans, which has been shuttered since the 2005 storm.

Louisiana officials contend the state should be reimbursed $492 million for the damage caused by Katrina's wind and flooding, while FEMA has countered with a $150 million offer. Big difference.

The federal money is a key component in plans to rebuild Charity with a 424-bed teaching hospital that is projected to cost a total of about $1.2 billion. Although the state hopes to complete the project in 2013, uncertainty over the amount of the federal government's reimbursement has caused problems.

On Aug. 6, Homeland Security Secretary Janet Napolitano announced a new arbitration process to expedite resolution of outstanding Federal Emergency Management Agency public assistance projects stemming from hurricanes Katrina and Rita. For projects in excess of $500,000 (like Charity), an independent, neutral panel of arbitrators would be employed to settle disputes over public assistance.

This seems to have almost been created with Charity in mind. President Barack Obama told the Times-Picayune in August that the arbitration panel will provide quick resolution to the Charity impasse.

"It was important for us not to try by fiat to solve the problem," Obama told the New Orleans paper. "The key was to make sure that there was a process where everybody felt they were heard. We came up with a sensible resolution, and I think that's what's going to happen, and the nice thing is we know within 60 days it's got to happen."

Meanwhile, the Veterans Administration continues to move forward with its $925 million project to replace the VA medical center in downtown New Orleans with a 200-bed medical complex. In addition, the VA just awarded contracts worth more than $153 million to build new health care facilities and expand existing services that provide care to veterans in the Biloxi, Miss., area. And on June 10, 2009, the VA dedicated a new 65,000-square-foot benefits office in downtown New Orleans. The regional office delivers benefits and services to more than 300,000 Louisiana veterans and their families.

Lastly, in order to lure back health professionals who left after Hurricane Katrina, the administration says the Centers for Medicare & Medicaid Services have provided funding for incentive payments to support recruitment and retention of primary care doctors, mental health providers, dental practitioners, pharmacists, registered nurses and allied health professionals and technicians.

The teaching and VA hospital projects in downtown New Orleans both have a long way to go. But the arbitration panel created by Napolitano should at least unclog the impasse in the dispute over how much the federal government needs to kick in for the teaching hospital. That's progress. And so we move this to a tentative In the Works.

Our Sources

AP, "Promises, Promises: Obama wins praise for Katrina," by Ben Evans and Becky Bohrer, Aug. 27, 2009

Times-Picayine, "Southern University at New Orleans gets long-awaited rebuilding grant" by  Bill Barrow, Aug. 17, 2009

FEMA Web site, "New Arbitration Panels for FEMA Public Assistance Program Concerning Hurricanes Katrina and Rita," Aug. 6, 2009

White House, Fact Sheet: Background on Gulf Coast Recovery and Nationwide Disaster Preparedness and Response Efforts

Times-Picayune, "'New Orleans has a unique place in...American life, and that's why it's so important now.'' Analysis," by Jonathan Tilove and Bruce Alpert, Aug. 23, 2009

Times-Picayune, "Red tape eased in rebuilding of N.O. schools," by Coleman Warner, May 16, 2009

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