Renovating Charity Hospital or Building a New Hospital in Post-Katrina New Orleans: Economic Rationale versus Political Will

Since September 2005, Charity Hospital of New Orleans has been closed due to Hurricane Katrina. A debate following the closing arose about whether this public hospital should be renovated or a new medical center affiliated with the Louisiana State University should be built. Using academic literature, government statistics, and popular press reports, we describe the economic implications that support the view that Charity Hospital should have been renovated. We also address why this policy was not pursued by demonstrating the influence politics and individual stakeholders (specifically, Louisiana State University) had on the eventual policy pursued. In this commentary we also note the political identity movement away from public-sector provision of services to private-sector interests.