Georgetown University Medical Center continues to operate in the red, with officials reporting an $83.3 million loss in fiscal 1999 by the prestigious teaching hospital and the schools of medicine and nursing.
The latest deficit extends a string of losses for the university's medical center, which lost $57 million in 1997 and $62.4 million in 1998.
The financial pressures have become so great that Georgetown, after a lengthy search, agreed last year to a partnership with MedStar Health, the Columbia-based owner of Washington Hospital Center and several Baltimore health facilities. Washington Hospital Center is the region's largest hospital, operating 777 of 907 licensed beds.
Details of the deal have not been released, but officials expect that patient care will be run by MedStar and that the university will retain control over the faculty.
Merger discussions have been underway since last spring, and officials from MedStar and the university say they are on track despite the long negotiations and in-depth study of each other's books.
Georgetown's financial problems are typical of major teaching hospitals. In the latter half of the 1990s, some of the nation's most important teaching hospitals reported massive losses. Government support for medical education declined, and health plans negotiated lower prices for hospital care and shifted more members to outpatient services.
"Like most academic medical centers around the country, we've been struggling with the changing health care economy," said Georgetown spokesman Paul Donovan, who said last year's financial loss was expected by the university.
Moody's Investors Service, which evaluates the finances of tax-exempt institutions that have issued bonds, left Georgetown's rating unchanged this month. The firm said the merger should go a long way toward curing the medical school's financial ills.
"Moody's believes that the university will virtually eliminate its direct exposure to clinical care risk either though [the MedStar partnership] or through some other means in a medium-term time frame," Moody's said.
The overall strengths of the university, including its robust endowment and fierce competition among applicants for the 11,582 full-time spots in its undergraduate, graduate and professional programs, suggest that Georgetown will survive the distress experienced by its health care institutions, Moody's said.
Georgetown raised $98 million in donations in 1999, up from $83 million the year before.