03:58 PM CDT on Tuesday, April 25, 2006

Melinda Deslatte / Associated Press Writer

BATON ROUGE, La. -- The top U.S. health official said Tuesday he will be a hands-on participant in rebuilding New Orleans' hurricane ravaged health system, but his vision for reconstruction would appear to shift the state away from its charity hospitals.

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Charity Hospital

U.S. Health and Human Services Secretary Mike Leavitt said he will dedicate a "substantial amount" of his time to working with Louisiana officials on repairing health care in the New Orleans area. But he said the system in place before Hurricane Katrina was "somewhat dysfunctional" and he would oppose reconstructing it.

"It would be wrong to rebuild the old system back," Leavitt told a joint House and Senate health care committee.

Louisiana currently cares for its uninsured and underinsured patients mainly through a statewide network of charity hospitals, the only state in the nation to run a statewide system of public hospitals.

The lion's share of federal and state dollars for the uninsured are funneled to those public hospitals, rather than to private hospitals that offer care to the uninsured. The federal government picks up about 70 percent of Louisiana's spending on the uninsured.

Leavitt said he wanted to see "the money we're sending essentially following persons and not institutions."

Those words could put Leavitt at odds with LSU, which runs the charity hospitals, some lawmakers, and possibly even Gov. Kathleen Blanco, who has been a continued supporter of the charity hospitals.

As secretary of the federal health department, Leavitt can waive rules and restrictions on how the federal health care dollars can be spent in Louisiana and help state officials more easily change the way it provides care to patients. He told lawmakers he would like the state and federal government to develop a large-scale waiver that will let the New Orleans area design a model system of health care.

Blanco praised Leavitt's offers of help, but when asked about a shift away from the charity hospitals, the governor didn't answer directly.

"I would say school's out right now. We don't exactly know how far-reaching this will be," she said.

A study commissioned by an arm of Blanco's Louisiana Recovery Authority recommended a restructuring of the way uninsured care is financed in Louisiana so that private and community hospitals can receive a share of the federal dollars for the uncompensated care.

Katrina flooded and shut down the two charity hospitals in New Orleans. LSU is working with the U.S. Department of Veterans Affairs on the possibility of building a shared medical complex in the city.

Charity hospital officials said they envision a smaller hospital primarily focused on teaching and research, but it's too early to tell how large the hospital would be or how it would be funded. Blanco offered her support to the joint medical complex and said it was important to keep a teaching hospital in New Orleans.

LSU hospitals spokesman Marvin McGraw said the charity hospital system wouldn't respond to Leavitt's comments.

Lawmakers on the joint health committee said they appreciated Leavitt's commitment to the New Orleans area health care rebuilding, but they didn't get into the specifics.

Leavitt said the rebuilding of the health care system will need committed local leaders, representatives of the health care industry, state officials and experts. He said the LRA and his office are working on a document guiding the rebuilding.

Though he set no deadline, he said his remaining years in office were limited and the state needed to move quickly to rebuild New Orleans' health system. He also said he realized there would be tension from competing health care institutions and groups that get funding from the state.

"Getting to a new system will not be without pain. It will be difficult," Leavitt said.

Sen. Tom Schedler, R-Mandeville, a former chairman of the Senate's health care committee, urged Leavitt to keep up the pressure for a new health system. And Senate President Don Hines, D-Bunkie, said there was a need to change a system he called fragmented, costly and duplicative.

But Hines added: "We're going to have a lot of turf battles to overcome and a lot of resistance to change."

(Copyright 2006 by The Associated Press. All Rights Reserved.)