Hospital Crises Could Buckle Area Network

Not so on the other side of the river, where the 110-bed Greater Southeast and 290-bed Prince George's Hospital Center have been buffeted by forces internal and external. Despite differences in ownership and size, their similarities stand out.

They are less than eight miles apart, once-respected bastions that attracted top doctors and nurses. But as the demographics and economics of their communities shifted, they began to lose privately insured patients. Those departures turned into an exodus.

Both then faced the same worsening challenges: mounting debt and inadequate capital, aging infrastructure and obsolete equipment. (At Prince George's Hospital, the boiler is patched with duct tape. At Greater Southeast, some machines are so old that repair parts are no longer manufactured.) With fewer paying patients, neither could upgrade to match competitors in the District or affluent suburban communities. They couldn't add lucrative services in such areas as orthopedics and cardiology.

National factors exacerbated local pressures: The federal government cut Medicare and Medicaid reimbursement rates. A nursing shortage forced administrators across the country to pay premium wages to attract enough staff members.

By the late 1990s, each facility was in dire fiscal straits. Dimensions had been managing the Prince George's hospital since 1983, and in 1999, a consultant recommended that it pursue a merger with a deep-pocketed organization. Greater Southeast declared bankruptcy and came hours away from a judge ordering its liquidation.

A look back suggests that that year marked the turning point for both hospitals. Neither ever recovered financial stability. And when D.C. General folded, Greater Southeast and Prince George's Hospital were harder pressed than their counterparts to absorb the indigent and uninsured patients who arrived at their doors.

Both became further embedded in the public's mind as the refuge of last resort, the safety net for the most marginalized.

"They were never able to rebrand themselves," Larry Gage, president of the National Association of Public Hospitals and Health Systems, said of Prince George's Hospital Center.

The same held true for Greater Southeast, which was further damaged by a second bankruptcy and such serious concerns about patient care that in 2003 it temporarily lost national accreditation and nearly lost its city license. Both setbacks occurred under Doctors Community Healthcare, now called Envision Hospital Corp., the firm that had bought the hospital out of its initial bankruptcy.

Neither Envision nor Dimensions has many friends left in town, a consequence of the recurring downward cycles that have led to heated exchanges between company executives and elected leaders. The two sides share little common ground. The corporations insist that government does not understand the full cost of delivering care to a sizeable indigent population; Envision Chairman Paul Tuft has said no other company has spent, or lost, as much investing in distressed urban hospitals.

Area officials said they have contributed mightily to help the hospitals succeed.

"The city was just hosing it down with money," said D.C. Council member David A. Catania (I-At large), listing the special appropriations, contracts and expedited payments directed toward the Arizona-based Envision. He and others charge that millions of dollars have been diverted. Regulators can't say for sure, however, because they never demanded an accounting.