NEW ORLEANS - Southern Louisiana's only trauma center was shut down by Hurricane Katrina, and what is left of the rest of the hospital system is only a step away from financial disaster, the president of the New Orleans Medical Society said.

"The available hospital services are strained to their limits," said Dr. Patrick C. Breaux, the medical society leader. "We are one bus crash, major fire or flu epidemic from disaster."

Donald Smithburg, chief executive of the Louisiana State University Health Care Services Division, said earlier in the day in Washington that the public health system must furlough 2,900 of its 8,000 employees next week, the first step toward permanent layoffs on Dec. 17.

"We're out of money, roughly after Thanksgiving," Smithburg said in a speech to a conference of the National Association of Public Hospitals. "We are running out of time."

Two of the system's nine hospitals, Charity and University in New Orleans, have been closed since they were severely damaged in the storm two months ago. They are the system's two biggest hospitals and include one of only two trauma care units in the state. The other seven are scattered elsewhere in the state and remain open.

Smithburg stopped short of saying the system would have to close any more of its hospitals. To avoid closing them, Smithburg said the system is also trying to obtain deficit spending authority from the state legislature, which meets in a special session to address Katrina issues next week.

Hospital system engineers have declared Charity and University total losses, but Smithburg said the system is awaiting a final decision from the Federal Emergency Management Agency on whether the two facilities will qualify under federal disaster law for full federal funding of replacements, about $750 million.

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