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1960 to 2005




Tulane & Charity

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Charity’s Slow Decline: 1960 to 2005

The 1960’s brought many changes to Tulane and Charity. In 1964 the Civil Rights Act was passed, and by 1965 Charity and Tulane School of Medicine were fully integrated, often with some resistance. Medicare and Medicaid were created in 1965, and many poor patients were now afforded federal insurance that allowed them to choose private hospitals over Charity. Charity’s patient base slowly began to decline, as did its finances.

Tulane also faced similar financial troubles in the 1960’s. In order to generate a greater base of teaching hospital beds and gain income, Tulane’s administration considered three options: merging with Ochsner Hospital, building a new academic hospital in downtown New Orleans, or moving the entire medical school to a new campus on the West Bank. The Tulane-Ochsner merger never came to fruition and came to be seen mainly as an effort by Ochsner to stave off competition from a new Tulane hospital. The conservative board of the University also decided against moving the school and building a new medical complex on the West Bank, claiming it would further damage the teaching and staffing mission at Charity and that Tulane did not have sufficient funds.

The move to the West Bank was largely the brainchild of then dean of the medical school, Charles Sprague. Around the time the University board declined to allow the move to the West Bank, Sprague was offered the position of dean and later chancellor of the University of Texas Southwestern Medical School in Dallas. He resigned in June 1967, and found the ability to expand he was seeking in Texas, playing a large role in building the Texas Medical Center.

The 1970’s brought more change and politics to Tulane-Charity relations. In spite of the new Tulane Hospital, the School of Medicine was still in dire financial condition, due to decreasing federal grants, a lack of any substantial private endowment, and Charity’s own financial shortcomings. Physicians who had traditionally been staunch devotees of Charity Hospital and yet able to straddle the divide between the hospital and the medical school became a dying breed. For example the eminent internist George Burch, at 65, wanted to continue his chairmanship of the Department of Medicine. Dean John Walsh, however, told him he would have to retire, as was school policy at the time. Burch then proposed staying on at Charity by establishing a Burch Heart Institute. Tulane officials feared Burch’s name would attract the best students to Charity rather than Tulane for fellowships, and openly fought against the Institute. Burch resigned from Tulane acrimoniously and the institute was abolished in 1974.

In the 1970’s Tulane’s involvement with Charity took two interesting and opposing turns. In 1975 Tulane opened its own private hospital as a source of income, mainly through the efforts of John Walsh, and in the process making potential trade-offs with its educational and research mission at the time. In order to generate revenue, both Tulane and LSU accelerated the practice of “skimming” patients from Charity that needed sophisticated, expensive procedures to their private hospitals, while “dumping” patients whose private insurance had stopped paying for a hospitalization to Charity.

In contrast to competing against Charity for paying patients, in 1974 Tulane agreed, with LSU, to take administrative control of Charity from the state. This meant Charity was less attractive for political patronage jobs, and state funding to Charity declined further. As an example of Charity’s diminishing research prowess, Andrew Schally, a Tulane endocrinologist, won the Nobel Prize in 1977 for the discovery of hypothalamic releasing hormones while conducting all his research at Tulane and the Veterans Administration hospital.

The 1980’s and 1990’s continued Charity’s decline. The physical plant continued to deteriorate. State funding shortages coupled with a slow economy meant Charity was chronically underfunded. The once grand hospital lost its accreditation due to poor conditions multiples times in the 1980’s. Partly in response to this, in 1999 the 1974 sharing agreement between Tulane and LSU for administrative control was revoked and LSU was given full control over the state’s charity system. During this time, Charity continued to function mainly as a result of Medicaid Disproportionate Share funds, which are federal funds paid to hospitals that see a large uninsured population.

2005 marked Charity Hospital’s death knell. On August 29th, 2005, Hurricane Katrina inundated the city, including Charity Hospital. Patients had to be evacuated by boat, described in sensational detail elsewhere. Charity has been declared unfit to provide health care and remains shuttered as of this writing. The debate over the future of Charity still rages.

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