The Hospital Corp. of America, the largest hospital chain in the country, knows well the problems of large nonprofit health facilities in urban areas. Yet company officials, who agreed last year to manage Prince George's General Hospital, have been appalled at the financial condition of the area's second largest public hospital.
"The more we dug, the more we found out," said Corbett A. Price, the HCA vice president who oversees the contract with 550-bed Prince George's General. "This financial situation is one of the worst I've seen. It is very, very severe."
The severity of the facility's cash flow problems, as well as the effects on patient care, are beginning to surface in detail, according to interviews and documents obtained during a Washington Post investigation.
Records made available by the nurses union and hospital administrators point to a debilitating shortage of employes, poor staff morale and the threat of the loss of accreditation at the facility, which is the hospital of last resort for the county's poor. Among the problems:
*A cash shortage. The hospital exhausted a $3.6 million bank line of credit, delayed mailing $3 million in checks it has written to vendors and failed to pay withholding taxes to the government, resulting in a $150,000 fine.
*Shortage of nurses. In a major layoff last August that was designed to cut costs, HCA fired 63 nurses. Since then, 150 full-time nurses have quit over working conditions, according to hospital officials and nurses, and only 64 regular replacements have been hired. The hospital also has employed 36 nurses supplied by outside agencies. The hospital now offers a $500 bonus to any nurse who persuades another nurse to join the hospital staff, and it plans to hire 80 foreign nurses.
*Increases in formal complaints. Forms filed by nurses to alert administrators to problems are running 60 to 80 a month, compared with 10 to 15 a month a year ago, according to Carol Bragg, president of the hospital nurses union, which represents 470 full timers.
*Threat to accreditation. In an internal survey last fall, HCA found what it called poor "risk management" -- a way to assess and limit the risks to patients through inadequate care -- it said could jeopardize the hospital's national accreditation when it comes up for review later this year.
*Curbs in liability insurance. St. Paul Insurance dropped its professional liability coverage from $15 million to $10 million last year. And, according to the internal hospital management audit, St. Paul viewed the facility "as a bad risk" and considered canceling all coverage, a course St. Paul later rejected.
Despite these and other problems, Winfield S. Kelly Jr., the head of the nonprofit corporation overseeing Prince George's General, said that after a traumatic year that has brought management shake-ups and a backlog of debts and lease payments to the county, the hospital is beginning to operate in the black on a month-to-month basis. Still, he said, financial needs remain severe.
"There's no way the hospital can generate enough money even with the best of management to overcome past problems and stay healthy," he said, adding that it will need help from the county government to cover costs.
The financial and staffing problems facing Prince George's General are typical of large metropolitan public hospitals, which have a special and often costly public mission of serving the poor along with the better-off, according to national experts.
At Prince George's nearly 30 percent of the patients qualify for Medicaid, a subsidy program for low-income and indigent patients.
"The load of care to the poor takes its toll on the provider of last resort," said Dennis Andrulus, director of research and policy for the National Association of Public Hospitals. "A lot are running with operating deficits."
Yet even seemingly good news, such as an increase in patient admissions ultimately producing more income, creates alarm at Prince George's General, especially among the overworked nurses.
"If we are really here to give quality care to our patients and maintain optimal standards," said an assistant head nurse in a memo to hospital officials after she resigned, "how are we to do this when we haven't the nurses to care for the patients?"
The nurse, who asked to remain unidentified, added in her memo, "On the night I write this letter, I was sent one R.N. and myself to take responsibility and give quality care to 27 patients. I was sent one nursing assistant to help with this patient load. The patients on this particular unit are monitored via telemetry for [irregular heart rhythms] and are considered more acute than a general medical/surgical patient . . . . "
An American Nurses Association spokesman said adequate care would require one registered nurse for every two acutely ill patients and one for six less seriously ill, or "non-acute," patients.
But nurses at Prince George's say they must often attend a much larger number of patients.
In interviews, other nurses who have recently resigned said they were frustrated by a lack of technicians, nurses aides and other support staff and by the large number of patients for which they are each responsible. They blame part of the problem on the firing of 650 employes from the three facilities that are part of the Prince George's public hospital system. Hospital administrators say conditions are improving but add that problems remain.
On April 7, the nurses union sent a four-page letter to the hospital administrators decrying "dangerously low levels" of professional and support staff and accusing hospital management of engaging in a "quest for profits at the expense of the quality of nursing care."
In response to such complaints, the hospital has said it will try to keep the number of patients down until it can hire more nurses.
Sending patients to other hospitals, along with a normal dip after winter months, resulted in a recent decline in the average daily census from more than 400 to about 360, officials said. The number of patients this year has ranged from 56 to 83 percent of capacity.
Phillippa Johnston, associate hospital administrator for nursing, said the situation is gradually improving but still difficult. "We recognize there are problems, and we're busting our butts to get them resolved," she said. "It's a real struggle."
Dr. David Goldman, former chief of medicine who remains loyal to the hospital and sends his own family members there, insisted, "Frankly, I think it's one of the better hospitals around. Its shock trauma and intensive care units are among the best in the country . . . . "
But even Goldman tempers his praise. "The creature comforts stink there . . . . I wouldn't want to be a not-too-ill patient there. It needs housekeeping, remodeling, modernizing and creature comforts, and additional personnel to prevent burnout of overworked people."
Other problems have plagued the hospital. In late January, state health inspectors turned up 28 pages of violations that the hospital must correct by May 9 or face the loss of its certification for Medicare and Medicaid patients, whose claims account for 49 percent of the hospital's patient revenues.
The state health department said that dietary policies were outdated and inappropriate and medicine carts were frequently left unattended. It also cited numerous maintenance and safety problems, criticized hospital housekeeping and found evidence of rats in a storage room.
The inspection also revealed inadequate patient records and care. "Patients on a low-sodium diet received ham sandwiches as nourishments," the inspectors' report said.
In a March 5 response, the hospital said it had already dealt with many of the deficiencies and outlined its plan to correct the rest.
The current problems came about despite a long history of county efforts to improve the hospital's management and operations.
The county's public hospital system -- which includes Prince George's General, the 236-bed Greater Laurel-Beltsville Hospital and an outpatient clinic in Bowie -- was managed for years by a politically appointed public hospital commission.
While some nurses say the hospital functioned well during these years, it was costing the county money for indigent care and other public services.
Based on the recommendations of a citizen task force, the council in 1983 created a nonprofit community-based corporation, Community Hospital & Health Care Systems Inc., to run the system.
CHHCS was in financial trouble almost from the start. It lost an annual county subsidy of $3.5 million for indigent care and had to pay about $3 million a year in rent.
Then, a month after CHHCS took over, the nurses struck. The 45-day strike left bitterness and a tarnished public image for the hospital.
Many doctors switched hospitals -- taking their patients with them -- and have never returned.
At the same time, public and private insurers began to limit what they would pay, further affecting the hospital's financial position.
Internal politics often preoccupied the board, culminating last year in open accusations of mismanagement, nepotism and conflicts of interest. Several board members were fired or resigned.
Last year, new directors were appointed and they inherited the three-year HCA management contract, agreed to by CHHCS.
Called upon to head the CHHCS board was former county executive Winfield Kelly.
"This system was certainly far more troubled than I knew coming in," said Kelly. "The day I walked in, they couldn't make the payroll . . . . Then, other surprises kept coming to us." Yet he said he hopes "with some luck" to preside over the hospital's recovery.
Among the surprises: Blue Cross had advanced the hospital millions more against future patient Medicare bills than would be paid in patient claims. The hospital wound up having to repay the insurers $14 million, according to George W. Arthur Jr., chief financial officer.
As a result of the large overpayment, Blue Cross has suspended making the normal advance payments to the hospital for a year, adding to its cash flow problems.
Then, when the hospital underwent a computer system conversion last July, no bills were issued for a month.
Now facing a $3 million rent payment due the county in October, Kelly said he hopes the hospital and county can negotiate a repayment.
With the county in a better financial position than it has been in years, County Executive Parris Glendening said he is sympathetic to the hospital's money problems.
"If the hospital can't make it without tax dollars, we're not going to put the patients out on the street," Glendening said.