New Orleans lacks healthcare workers

A shortage of healthcare workers in New Orleans has driven up the price of labor, making hospital Medicare reimbursements insufficient, a report said.

Josh Kelley, a HealthLeaders-InterStudy market analyst and author of the report "New Orleans Market Overview," said hospital executives say rising salaries, which are needed to attract professionals and service workers -- especially doctors -- to New Orleans after Hurricane Katrina are a primary cause of hospitals' financial problems.

Many workers returning to the region have jobs in the service and construction industries, which do not offer health benefits. It is this large upswing of uninsured patients and increased labor costs that have outstripped hospital Medicare payments in New Orleans resulting in major losses for the area's largest hospitals, Kelley said.

The report said most physician practices remain in New Orleans' suburbs, where medical services and the region's population are now concentrated. However, the long-term stability of healthcare in New Orleans depends on programs that draw physicians to the city.