Eight years ago, Arlington Hospital was one of its own worst patients. Its fiscal pulse was dangerously weak and its image in the community was on the critical list.
"The word was that this wasn't the swiftest place to go unless there was a terrible need and you couldn't make it across the river," said Henry O. Lampe, who became president of the hospital's board of trustees a year ago. "The place was practically bankrupt."
Both those problems are things of the past, said officials of the Arlington Hospital Foundation, the parent corporation. But the hospital, 38 years old, isn't out of the recovery room yet. For, just as it finally managed to get itself in shape fiscally, it is faced with what may well be its toughest fight.
The nation's largest hospital management organization, the Hospital Corporation of America (HCA), has purchased the nearby Northern Virginia Doctors Hospital. That means the 350-bed Arlington Hospital can expect intense competition for patients and doctors from a well-organized health services giant in what is widely regarded as one of the nation's most lucrative hospital markets.
The arrival last week of HCA on the local scene did not got unnoticed, or unchallenged, by the Arilngton Hospital Foundation. Indeed, the foundation thrust itself into the bidding war for Doctos Hospital in a futile effort to bar its financially well-muscled foe from the Northern Virginia market.
"They [Arlington Hospital] wanted to improve their position in the marketplace and make more money," said Dean Montgomery, executive director of the Health Systems Agency of Northern Virginia, a regional health planning organization. "They didn't want to have a strong competitor in their back yard."
It is not clear what the competition will mean to Northern Virginia consumers. William (Gerry) White, an HCA vice president, pledged that competition from the $3.5 billion heath-care conglomerate will encourage better service for lower prices at many area hospitals.
Some local health care professionals fear, however, that HCA will compete with other facilities only for those patients who offer the greatest profit under a tangled set of reimbursement rules set by federal and state governments and insurance companies.
"I think what they are most afraid of is that HCA would come in and skim off the higher-paying medical and surgical patients, leaving the rest of us with the lower-paying indigent, obstetric and emergency patients," said one health care aide associated with Fairfax Hospital.
The controversy stirred by the coming of HCA seems out of place in Arlington. Unitl its recent struggle over the sale of Doctors Hospital, Arlington Hospital seemingly was untouched by the high-stakes, high-finance world of hospital administration. Founded by a federation of women's clubs in 1934, the hospital was built on North George Mason Drive on what was then a 16-acre dairy farm. It had its first patient in 1944.
The hospital was operated for years by a loosely knit group of community leaders who lacked training in modern-day hospital management, according to board of trustees president Lampe. As a result, it came close to closing in the early 1970s.
"It was hard [for the hospital] to buy anything because people didn't want to take your credit, and we didn't have any cash," he said.
Lampe said those problems are a thing of the past, thanks to the effort of Dr. Kenneth M. Haggerty, president of the board of directors of the hospital foundation. Under Haggerty's leadership, the hospital has erased a debt of nearly $12 million, increased its annual budget from $18 million to $40 million, and increased its admission of patients by 15 percent over the last five years.
In addition, the hospital foundation has raised nearly $2 million in contributions over the past two years -- more than enough to pay for the gleaming John T. Hazel auditorium, named for the hospital's first surgeon and father of prominent Northern Virginia developer John T. Hazel Jr., as well as financing sophisticated new equipment.
These factors demonstrate that the hospital has turned around its negative image, said John P. Sverha, the hospital's administrator.
"There is a factor of inertia involved [in changing community perceptions]," he said. "You can actually improve a hospital, but the community won't perceive it for a while because the frequency of contact by a resident with a local hospital seems to be rather small."
Haggerty, Lampe and Sverha attribute the hospital's recovery to a number of factors: a change in the membership rules for the board of trustees, which had been a self-perpetuating body with little business know-how; hiring a professional hospital administrtor and staff; buying sophisticated medical equipment and comuters for billing, and initiatng aggressive public relations and fund-raising campaigns.
Still, there are signs of lingering problems. A recent hospital survey of Arlington residents found that many have a poor impression even now of some of the facility's services. And figures compiled by the Health Systems Agency of Northern Virginia show that Arlington residents only one hospital day in three at Arlington Hospital. The survey showed that Arlington residents spend more time in hospital facilities in Maryland, Fairfax and the District, as well as in Northern Virginia Doctors Hospital.
By comparison, residents of Alexandria spend almost one in two of their hospitalization days in Alexandria Hospital, the city's largest health-care facility.
At least in part to counter this trend, Arlington Hospital has stepped up promotional efforts, sending mailers to Arlington residents uring them to have their babies in the hospital and running newspaper ads trumpeting the hospital's location near I-66: "The Arlington Hospital welcomes I-66 and you," the headlines say.
"We said, 'Wait a minute, we have a really good hospital and there aren't enough people out there who are aware of it,'" said Beverly Rawlings, the hospital's public relations director. "We said, 'We can compete with Fairfax and Alexandria hospitals and we ought to start on it.'"
Arlington Hospital Foundation officials concede that it was partly fear of competition that prompted them to put in a bid for Norther Virginia Doctors Hospital, a 225-bed facility at 601 S. Carlin Springs Rd. They said that the presence of HCA, which owns hospitals around the world, would force them into a costly competition for newer and sometimes unnecessary hospital equipment.
HCA officials have pledged to pump between $5 million and $7 million into Doctors Hospital over the next three to five years, most of it dedicated to installing the newest equipment.
"Every time a new piece of equipment comes down the line, if [Hospital Corporation of America] really want to market [Doctors Hospital], they'll buy it the first week it's issued," said Haggerty. "Then we'll have to buy it...[because] the physician is going to put his patients where the things are that they need."
Haggerty had maintained that the Arlington Hospital Foundation could operate Doctors Hospital more efficiently, avoding duplicate purchase of expensive equipment and providing better coordinated local health services.
But members of the Doctors Hospital board were skeptical of AHF's $20.1 million bid, labeling it "ambiguous and uncertain" and saying that the founation had not set aside adequate funds to complete the purchase.
"It seemed to me that this essentially was a large scale harassment, intended to forestall and stymie HCA from coming into the market," said one source closely associated with Doctors Hospital.
Now that the sale of Doctors Hospital seems a certainty, Arlington's largest health-car facility probably will learn firsthand how competitive the Northern Virginia marketplace can be.
"We are, of course, big believers in free enterprise and competition," said HCA's White. "We are highly competitive."