By Steven Pearlstein
Friday, February 16, 2007

On the eastern side of the District, you've got three hospitals that are too small and too limited in the services they offer, with not enough private doctors sending insured (read: paying) patients their way.

One, Greater Southeast Community Hospital, was bought out of bankruptcy a few years back by a sleazy Arizona outfit that has bled it so dry that the staff recently ratted it out to District health officials, who threatened to shut it down.

Another, Howard University Hospital, located only blocks from two wonderful academic hospitals, has had continuing problems with service quality and can't generate the patient volume to support residency programs for its affiliated medical school.

And the third, Providence Hospital, in the shadow of the Washington Hospital Center and Children's Hospital, may only now be returning to profitability after painful staff cuts.

Just across the border, on the western edge of Prince George's County, you've got a county-owned community hospital that, because of mismanagement and a tough patient mix, is bleeding cash, requiring an emergency $14 million taxpayer bailout just to keep its doors open until June.

In short, four hospitals within a 30-minute drive of each other, serving a patient population that is disproportionately poor and uninsured -- all struggling to survive in an era of shrinking demand for in-patient hospital beds.

The free market is sending a pretty strong signal about what's required here -- a consolidation that would leave the region with fewer but bigger, better and more-financially-viable hospitals. But rather than let nature take its course, each hospital seems determined to become one of the survivors, cheered on by employees who fear losing their jobs, neighborhood residents who mistake convenience for medical necessity and politicians prepared to indulge both by throwing good money after bad.

One of the strongest market signals comes from the best possible source: the people who already operate hospitals in the region.

When its current owner, Doctors Community Healthcare Corp., was finally pressured by the city to put Greater Southeast up for sale, all the local players looked at it, but not one made an offer.

So now Doctors is left to negotiate with a lone bidder, Carl D. Jones, a politically connected businessman from Prince George's County who made his money as a government paving and building contractor and who was an unsuccessful bidder for the Rosecroft Raceway when it looked as if slot machines would be authorized at Maryland's race tracks.

Jones was a big donor to County Executive Jack Johnson and former D.C. council member Vincent Orange and now relies on former council member John Ray to speak for him on the hospital project. But when asked what experience or financial backing Jones would bring to the project, Ray would only say that all would be revealed in due time.

What we can reveal here is that Jones is hoping to strike a deal to tear down Greater Southeast, build a smaller hospital elsewhere on the site, and hire George Washington University Hospital to run it as a satellite community hospital, all of which makes some sense. But GW's parent, the Universal Health Services hospital chain, is rightly concerned enough about the economics of the project that it will only participate if Jones and his still-unnamed partners are willing to absorb any operating losses. And Jones and Ray are angling to get the city to pay for most of the estimated $125 million construction cost of the new facility from the $245 million the city will receive as part of a national tobacco settlement.

For its part, Howard is still smarting from the demise of its plan, worked out with former mayor Tony Williams, for a major new health complex and teaching hospital on city land near the D.C. Armory and the site of the old D.C. General Hospital.

The overly ambitious scheme was done in by opposition from the city's other hospitals and health advocates, all of whom convinced the city council, and eventually Williams himself, that the real need was for better primary and preventive care delivered at community "healthplexes," facilities that combine doctors' offices, outpatient surgery, an emergency room and a 24-hour urgent-care center.

That pretty much puts Howard back at square one in its search for a quality, economically viable teaching hospital that would allow it to fulfill its mission of training black doctors and providing care to the region's black community.

And while Providence Hospital claims it has turned the corner financially, it still struggles to attract enough specialists to guarantee the patient volume required to support a full range of services and the most modern equipment. Perhaps that is why Providence has thought about a possible collaboration with Prince George's Hospital Center.

Dimensions Healthcare System, which operates the county hospital, is yet another outfit that has put itself up for sale, only to find no takers. To make itself more attractive to a would-be buyer, Dimensions came up with the loopy idea of building yet another new hospital in Bowie until state regulators balked. Now the governor and some legislators have proposed forcing a reluctant University of Maryland Medical System to take over Dimensions, while County Executive Johnson says he's negotiating with a possible private buyer that he won't name.

Unfortunately, there will be no lasting solution here until the political leaders of the District and Maryland take a hard-nosed look at how many and what types of medical facilities are really needed, where they would best be located and how they might be jointly financed.

District Mayor Adrian Fenty has already taken a step in that direction by commissioning a six-month study from the health experts at the Rand Corp. Gov. Martin O'Malley and County Executive Johnson would do well to co-finance the study and take seriously its recommendations rather than embarking on yet another doomed strategy to save every existing hospital.

Steven Pearlstein can be reached atpearlsteins@washpost.com.