More than a year after a special oversight panel was formed to help stabilize its finances, Prince George's Hospital Center continues to struggle with the economics of caring for the poor and uninsured.
Dimensions Healthcare System, the nonprofit operator of the county's hospital system, has lost $50 million over the past seven years and typically has about a week's worth of cash on hand. State regulators, who use cash reserves as an indicator of a hospital's financial health, recommend at least 100 days of ready funds. An $11 million payment to its employee pension plan is due this fall.
"It's unlikely to collapse tomorrow, but it's not a viable institution, and everybody knows it," said Del. Doyle L. Niemann (D-Prince George's), part of a delegation of state lawmakers recently briefed by hospital officials.
The predicament mirrors that of public hospitals throughout the country that serve uninsured or low-paying Medicare and Medicaid recipients, and the burden has increased with the demise of D.C. General Hospital, shuttered by the District four years ago. Greater Southeast Community Hospital, now the only hospital in Southeast Washington, has struggled with bankruptcy and allegations of poor care.
The proportion of low- or non-paying patients at most Maryland hospitals is about 20 percent. At Prince George's Hospital Center, which the county took control of in 1970, it is more than 50 percent.
With limited resources, the hospital cannot upgrade equipment, hire staff or make other changes that would enable it to compete with other hospitals in the region for paying patients.
To recoup its large losses, it has sought, and received, rate increases from the state. But the relatively high rates also make it difficult to compete for managed-care contracts. Even the county's own health insurance company does not send patients to Prince George's Hospital Center or other facilities run by Dimensions, including Laurel Regional Hospital, two nursing centers and the emergency care and ambulatory surgery center in Bowie.
Efforts to affiliate the system with a teaching hospital -- which would provide a source of young, relatively low-paid residents to give care and bolster an aging physician network -- have been unsuccessful.
To address these issues, an eight-member oversight panel was created in February 2004 by the state and county as part of a five-year, $45 million aid package for the hospital. But some elected officials acknowledge that little progress has been made.
"I don't think we're five feet from where we were before," said council member Camille Exum (D-Seat Pleasant), who also sits on the Dimensions Healthcare board of directors. "And that's because we still haven't addressed the systematic challenges that need to be addressed. [The County Council] knew the short-term fixes weren't going to do very much."
Others disagree with Exum, arguing that the road to repair the hospital's financial situation is long and arduous. They say that the actions taken so far, including layoffs, were needed to keep the system functioning in the short run.
"Operations have been shored up. They've cut a lot of the so-called fat and overhead," said Sen. Ulysses Currie (D-Prince George's). "I believe we are further along than where we were before."
County Executive Jack B. Johnson (D), who has blamed many of the system's problems on poor management, said that an overhaul of top executives and the hiring of Cambio, a turnaround company, has reduced the hospital's operating costs. The challenge, he said, is increasing the number of insured patients who use the hospital.
"If we had a 15 percent increase in paying patients, we wouldn't be having this conversation," Johnson said.
In January, the committee, whose chairman is Morton I. Rapoport, former president of the University of Maryland Medical System, recommended that the county sever its ties by the end of this month. It suggested various avenues: Negotiate with a large hospital system to take it over, arrange a sale to a third party or retain a management entity to take over the system's operation.
No action has been taken on the recommendation. Niemann said part of the reason is a level of distrust among stakeholders.
"The county doesn't trust the state, the state doesn't trust the county, the county executive and County Council don't trust each other," he said. County officials say they worry about the $80 million in debt that the system carries. If it dissolves, it is unclear who would assume liability.
Meanwhile, hospital officials have come up with a long-term plan, still in draft form, that includes opening a new hospital in the Largo-Landover area, possibly on the site of the abandoned Landover Mall, and working with state and county lawmakers to come up with a stable funding stream, possibly by creating a special taxing district.
Two years ago, state regulators denied Dimensions Healthcare Systems' request for a rate increase. At that time, hospital officials said the system would not be able to function without the additional money.
The need for cash eventually led to discussions with the state to come up with an agreement to hire a "turnaround team" of consultants, appoint an oversight committee and infuse millions of dollars of cash into the system. The agreement was signed in February 2004.
"It was designed to stabilize and buy time, and it's done that," said Johnson, who said he is scheduled to meet with Currie, chairman of the Senate Budget and Taxation Committee, and members of the council next week to discuss the hospital's future.
As the clock continues to click, Dimensions continues to lose money.
In February, as part of the agreement with the county, the state permitted Dimensions to increase the amount it charges patients. The 3.5 percent increase pumped $10 million into the system. But it was allowed for only one year.
"It was meant to be a bridge until they could bring in a consultant to generate funds, lower costs and secure other financing," said Robert Murray, executive director of the Maryland Health Services Cost Review Commission. "The rate system has been supporting them for years, and they were not becoming efficient on their own."