MedStar faces tensions with community clinics over primary-care expansion in District

For a quarter-century, Mary’s Center, a community health center in Adams Morgan, has served patients too poor to be treated elsewhere. Like many other ­safety-net providers, which are required by the government to treat patients regardless of their ability to pay, the center has struggled constantly for money.

So officials were looking forward to the opening of the new health insurance exchanges created by the Affordable Care Act: More patients with coverage would bolster the bottom line. To attract more young professionals and families, they decided to offer walk-in services for problems such as strep throat and sprained ankles.

But in November, regional hospital giant MedStar Health opened a pair of clinics two blocks away offering just those services — and wide-screen TVs, to boot — so Mary’s Center dropped its plans. It shelved proposals to offer radiology services, because MedStar was providing them. And then it began losing patients and doctors to MedStar.

“This is like David and Goliath,” said David Tatro, chief operations officer of Mary’s Center, a nonprofit that operates four clinics in the District and Maryland. If forced to compete directly with MedStar, he said, “Mary’s Center will cease to exist.”

MedStar isn’t apologizing. “We are trying to bring MedStar services to our patients and to patients who would like to be served by MedStar,” said Eric Wagner, an executive vice president. “None of us sat down and said, ‘Let’s go try and steal patients from somebody else.’ ”

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The tension is an unintended consequence of the health-care law, which has set off an intense competition for a growing number of privately insured patients, who tend to be the best-paying customers. Under the law, thousands of people in the Washington area and millions across the country are getting coverage for the first time. That has prompted a variety of health providers to move into neighborhoods that were once the exclusive turf of community health centers, which are designed primarily for low-
income patients.

For many consumers, having additional places to get medical care will provide more choice and convenience, health experts say. But community health centers worry that the bigger providers will siphon off the insured, leaving them with more uninsured patients. That, they say, would imperil them financially and hurt the people who have no other place to get care — including illegal immigrants and others who won’t benefit from the health-care law.

In the District, the trend is exacerbated by rapid gentrification in areas such as Adams Morgan, which is attracting more-
affluent residents who appeal to providers. In gentrifying neighborhoods, “the chances of community health centers encountering ‘cream-skimming’ from a private competitor may be much greater than, say, in central-city Hartford,” said Sara Rosenbaum, a professor of health law and policy at George Washington University.

Over the past year, MedStar Health, a $4.2 billion nonprofit health-care system based in Columbia, Md., has opened six ­urgent-care clinics in Maryland and two in the District under its for-profit subsidiary. It’s planning to open one more in Maryland and another in the District — part of a strategy to offer primary care in convenient locations.

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The move also will shore up MedStar’s market dominance. As the largest regional provider in Maryland and the Washington region, it owns 10 hospitals, including MedStar Washington Hospital Center and MedStar Georgetown University Hospital. (It is also one of three Medicaid managed-care providers in the District.) Under the health-care law, hospitals get paid less for admitting patients and more for managing the health of the broader population.

Gita Agarwal, a doctor at the Mary’s Center clinic in Adams Morgan, said that before the two MedStar clinics opened, four or five of the 26 patients she sees every day had private insurance. They tended to be young and healthy, easy and cheap to care for, often needing just a prescription refill or a quick physical. Now, she said, only one or two of her patients in a given week have private coverage. Overall, Tatro estimates that each month the clinic is losing about two dozen prospective patients with private insurance to MedStar.

That worries community health centers in Southeast Washington, where MedStar plans to open two clinics in 2017 in the Skyland Town Center development near Anacostia. Three community health clinics are ­located within a mile of the site and 12 within a five-mile radius, ­according to advocates.

“The entry of more commercial enterprises, some of which are hospitals, may be something of a threat to our long-term survival,” said Vincent Keane, executive director of Unity Health Care, which operates 13 community health centers, including one in Anacostia. He said community clinics provide care that is as good as anybody else’s, but he added: “We don’t have deep pockets. We can’t take losses.”

In August, city regulators gave preliminary approval to MedStar’s Skyland proposal, but the project must go through several more steps. One member of a group advising the city recently told MedStar officials that they must prove the organization is not “an alligator” that will “eat up” the clinics. A final decision by D.C. health regulators could come later this spring.

Wagner, the MedStar official, said the clinic expansion is a response to rising demand for primary-care services and the need to treat people in settings that are less expensive than emergency rooms.

Most community health centers, like Mary’s Center, are nonprofits that rely on federal funding for much of their budgets. Their federal reimbursements are at a higher rate than those of other providers, and in return, the clinics must accept all patients regardless of their ability to pay. Besides comprehensive primary care, many of the health centers also provide dental, mental health and other services. Mary’s Center, for example, offers behavioral therapy for parents and children and free Zumba classes.

The MedStar clinics treat uninsured patients but generally only if they pay something for the service. At MedStar’s primary-care clinics, patients can apply for a sliding-scale fee — but the decision is up to individual office managers. At Mary’s Center, uninsured patients receive care under federally set sliding-scale fees; some don’t pay anything.

In Southeast Washington, Med­Star wants to open a primary-care clinic and an urgent-care clinic side by side in the Skyland Town Center, where D.C. Mayor Vincent C. Gray (D) recently presided over a long-anticipated groundbreaking for Wal-Mart.

Such competition could spur nearby community clinics to improve their services; patients in the area have sometimes had problems getting access to care, said Leighton Ku, a professor of health policy at George Washington University. “In general, the more choices there are, you have to think that’s a good thing,” he said.

But advocates for community health clinics say the MedStar proposal could undermine a clinic infrastructure the city worked hard to create. Between 2004 and 2008, the District spent $70 million from the tobacco industry settlement to build, expand or renovate community health centers in medically underserved areas, said Jacqueline Bowens, executive director of the D.C. Primary Care Association, a nonprofit that represents health centers.

At a March 13 meeting, MedStar executive Bob Gilbert sought to reassure the community health clinics and the advisory group considering MedStar’s plans. He acknowledged that MedStar needs to be more collaborative. “We were thinking too much about our own patient base and not enough about the community,” he said, referring to its Skyland proposal. He pledged to redouble efforts to meet with community clinic leaders, and he said MedStar was working on an agreement with Mary’s Center.

At Anacostia’s Unity Clinic, about 10 blocks from Skyland, medical director Andy Robie said he suspects that MedStar is hoping to attract young professionals moving into the area, as well as residents from the more upscale Hillcrest and Penn Branch neighborhoods.

MedStar’s Wagner said the Southeast location was chosen because it’s centrally located and highly visible. “We want it to be convenient for where consumers will be,” he said.

Emily Besancon, 27, who moved back to Washington last year and has insurance through her employer, is the kind of patient coveted by both Mary’s Center and MedStar. She recently saw Laura Hofmann, a doctor at MedStar’s Adams Morgan primary-care clinic, and liked her. She decided she wanted Hofmann to be her regular doctor.

Until June, Hofmann worked at a Mary’s Center clinic in Silver Spring, often staying until 7:30 at night to write patients instructions in Spanish, according to her colleagues. But MedStar was able to recruit her with a more attractive package, colleagues said. A MedStar spokeswoman said Hofmann would not comment.

Janelle Alexa, 30, who is pregnant with her second child, began going to Mary’s Center in Adams Morgan earlier this year, making the 30-minute trip on bus and subway from her home in Riverdale in Prince George’s County. Uninsured, she had been unable to find care at clinics near her home.

On a recent weekday, she and her boyfriend, Pedro Martinez, who works construction jobs part time, were waiting for the results of routine blood tests. Under the clinic’s sliding-scale fee schedule, Alexa will pay $800 for her twice-a-month prenatal visits and delivery at Providence Hospital in Northeast Washington.

Alexa doesn’t know about the new MedStar clinic down the street. She’s hesitant to check it out, because she doesn’t have insurance and isn’t sure what it might cost her. She is already comfortable with the care she is getting at Mary’s Center. “I like the doctor,” she said.

Alice Crites contributed to this report.

Lena H. Sun is a national reporter for The Washington Post, focusing on health.
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