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Bob Davidge’s 28 years as CEO of Our Lady of the Lake Regional Medical Center make his name nearly synonymous with that of the institution he leads.

But nothing lasts forever. Davidge, 65, announced last month that he’ll retire in January 2008.

It’s a safe bet that during that time he’s learned a thing or two on the subject of hospitals and health care. Davidge sat down with Business Report to share some of his views on the industry, state and national health care challenges and what he plans to do after retirement.

Question: What was the Lake like when you arrived as CEO in 1979?

Davidge: They’d already relocated from downtown. The organization had been in town since 1921, but this facility was brand new. There were people saying that they wouldn’t make it because it was too far out of town. This was out in the sticks. Interestingly enough, the house was full every night. We couldn’t put another patient in. It was very modern. It was one of the first hospitals in the country to have all private rooms.

What’s changed since 1979?

In 1979, almost 100% of our surgery and across the country was done on an inpatient basis. We’d do 100 to 110 cases a day, all of them inpatients. Today, 70% or more of your surgery is done on an outpatient basis. It’s amazing. Everything’s moved to a very short stay. That has had an interesting impact on the reimbursement environment.

What’s been the effect?

We’ve seen a disproportionate increase in the cost per stay because of the moving of patients to the outpatient setting. An economist could explain that better, but that’s just what happened. We saw accelerating charges for per-patient day and per patient stay during that 1980s-’90s period. We’ve got myriad examples of how that happened in that time period. That brought on managed care and the demands for change in health care delivery.

In light of the outpatient trend, do big hospitals like the Lake become less relevant?

The majority of our patients come through the emergency room. These are sick patients who need complex care. You have hospitals who specialize in the short stay or ambulatory care. They’re not bad. They’re just different. Our future will be in the complex patient.

But with everything going on in health care, running a hospital is tougher than it used to be, right?

I don’t ever want to paint a gloom-and-doom picture because I don’t feel that way. We lumber along and deal with the problems that we’re dealt. If you go back to 1921—the sisters started the school of nursing; the hospital didn’t open till ’23— that was no piece of cake then. I try to look at all of this with a historical perspective.

What’s the best scenario for health care delivery and medical education in Louisiana?

I believe (LSU) must have a home, a place to call their own for core services—whether it be a trauma center or forensic work or what have you. But the bulk of your graduate medical education will be done with existing providers like the Lake that have the clinical resources, pathology and human resources to provide the best training environment. I think that course is already determined. LSU was on that course before Katrina. Katrina accelerated it.

You’ve been quoted saying U.S. health care is on an unsustainable course. Can you elaborate?

We have this accelerating downhill spiral in numbers of people covered by health insurance. If it weren’t for Iraq, this would be the No. 1 issue on the national agenda. As I look forward, I see nothing on the horizon that’s going to cause that to change. I think there will be an outcry for national health coverage—some sort of scheme. It’s going to have to make more sense than Medicare Part D.

What about criticism that a national system will erode the standard of care Americans are used to?

No matter how you slice it, there will be a rationing of health care services. We’re already doing it. The market’s doing it. We’re going to have a more logical, less acceptable rationing of health care service. Nobody’s going to like it when it comes to themselves.

Are we talking Canadian-style health insurance?

I don’t know whether the plan will look like the Canadian plan, the British plan, the German plan, the French plan or the Japanese plan. But somehow we’re going to have to provide basic universal coverage for all Americans.

Some would argue that market-oriented solutions such as consumer-driven health plans should be given a chance.

We all want to believe that the market is going to solve this and save health care. The problem is we don’t have a traditional market in health care because of cost shifting and because of insurance being provided through employers and subsidized for the most part. Even if the free market theorists are correct that it could get there, the public’s patience is not going to tolerate it. The public doesn’t have the patience to wait for the market to figure this out.

Twenty-eight years is quite a run for a hospital CEO. What does it take to be successful in a role like that?

If I’ve been successful, I think it’s because I had a keen interest in what I was doing. That’s who I am.

What are your post-retirement plans?

The energies that I have remaining I want to use to help in the transition for whomever follows me. I’ve also been married 46—going on 47—years, and she’s been making a list of things for me to do for 46 and a half years, so I’ve got a long list of things I’ve got to work on.