The medical and financial assumptions undergirding a 250-bed hospital complex planned for the city's eastern wards are highly unrealistic, according to some health care experts and an array of critics of the District's venture with Howard University.
The assumptions are key to the long-term viability of the National Capital Medical Center, a project with state-of-the-art aspirations and costs. They depend on sharp increases in surgical procedures and enough privately insured patients to help offset the many patients expected to arrive with no coverage. They figure the facility will turn a profit within three years, a timetable many think is extremely optimistic to implausible.
Should the numbers fall short, the consequences could extend beyond National Capital Medical Center to other providers and District medical initiatives.
"These are huge decisions we're going to have to live with for decades," said Bruce Siegel, a research professor in George Washington University's School of Public Health and Health Services. "Billions of dollars will be at stake, with implications for every hospital and clinic in D.C."
As successor to the shuttered D.C. General Hospital at 19th Street and Massachusetts Avenue SE, the complex would again put an emergency room and the highest-level trauma care within minutes of residents east of the Anacostia River.
Yet with research space and a physicians office building also proposed, the National Capital Medical Center is being touted as much more -- as a crucial health-care hub to historically underserved communities with some of the worst chronic disease in the District. Howard would own and operate it, though public funds would pay half of the hospital construction. That total, from groundbreaking to ribbon-cutting, is estimated at more than $400 million.
Both sides acknowledge the formidable challenge in affording the costs. Given Mayor Anthony A. Williams's stipulation that the city would not cover operating shortfalls, the project would have to break even on its own. (An early Howard budget paper included a "required subsidy" of at least $15.9 million annually. In one of his few public comments on the hospital, however, the university's president in February denied the need for taxpayer funds and said such assistance would make the operation look like a charity hospital.)
"To ensure profitability," the parties wrote in a joint July prospectus, the National Capital Medical Center must not only attract patients but the right balance of patients, and "a substantial number" must come not only for medical care but for the outpatient and inpatient surgeries that generate greater per-bed revenue.
City Manager Robert C. Bobb said this week that Howard has a very strong incentive to make sure its projections hold up. "We're not subsidizing this hospital," he emphasized. The city's own consultant has not disputed the university's latest forecasts, he said. "They haven't raised objections to what they've reviewed."
Bobb is the mayor's point man on the plan, and he has pitched it with some passion during months of community forums. "I find it so disingenuous," he said in an interview Wednesday, "when those who oppose this hospital turn a blind eye to the fact that . . . [hospital] beds are poorly distributed within the District." After decades of closures, just one acute-care facility remains east of Capitol Street, and just one is east of the Anacostia. They provide no trauma care.
This geographic disparity has driven much of the discussion from the start and is a different point than whether the city has enough hospitals. The District has more than twice as many beds per capita as the national average; more than a thousand are licensed but not in use.
The question is where the beds are located. Although the National Capital Medical Center's proponents want them closer to their Southeast and Northeast neighborhoods, the medical security such proximity would offer is only half of their argument. The other half is their belief that their communities deserve equity.
"Why shouldn't we have the same basic services other people have?" council member Vincent C. Gray (D-Ward 7) asked after a forum on the issue this summer.
An answer may lie in Howard's own numbers.
The university anticipates the new hospital's occupancy rate by Year 5 reaching 80 percent -- higher than the current occupancy levels of all but two competitors and well above that of Howard's existing hospital on Georgia Avenue NW. And five years after opening, the complex would be doing 15,000 ambulatory surgeries annually -- double what Howard University Hospital recorded in 2004.
"A characteristic of most health care systems is the phenomenon of supply-induced demand," said Nicole Lurie, a health policy analyst at Rand Corp. "We have to be very careful not to create that problem here."
Howard has described its targets as "aggressive." Some are describing its margins as risky. In the National Capital Medical Center's third, fourth and fifth years of operation -- already moneymaking years, officials predict -- one document shows it typically would have less than a month's cash on hand.
"If the smallest thing goes wrong, they can't meet payroll," cautioned Siegel, whose work at George Washington University follows stints as New Jersey state health commissioner and president of New York City's hospital corporation. "They're going to be under intense financial pressure."
Unlike Siegel and other skeptics, Professor Alan Sager of the Boston University School of Public Health is "100 percent" in favor of a new hospital rising from the figurative and literal ashes of D.C. General. Citing need and economics, however, he said its model should not be a major research and teaching institution.
"Washington has more than enough of those already," said Sager, who studies urban health care and in 2001 analyzed D.C. General's waning days. Another high-cost medical center, particularly one that assumes 11 percent uninsured patients, cannot survive in the District without ongoing subsidies, he said.
"They're certainly kidding us," Sager has decided, referring to Howard officials' calculations that the future undertaking would experience merely two years of operating deficits. "But I don't know if they're kidding themselves or just saying what they think they need to say."
The partners have promised to have all aspects of a financial, performance and governance agreement ready for the D.C. Council by Jan. 1. Since the mayor announced the National Capital Medical Center in late 2003, its details have changed repeatedly and its supporting evidence divulged sparingly, even to council members and the rest of the city's health care community.
An outside evaluation continues to be difficult because of that. The city's consultant concluded that Howard University Hospital should be closed to improve the new endeavor's chances, but administrators have indicated only broadly how they would downsize it. The 291-bed Georgia Avenue facility is supported every year by a special federal appropriation; it is unclear whether the money, $30 million in fiscal 2005, would or could be shifted.
Neither the District of Columbia Hospital Association, of which Howard University Hospital is a member, nor the D.C. Primary Care Association, which works to strengthen the community safety net, endorses the venture. Both say they fear it will destabilize a "fragile" hospital system, possibly triggering more closures, while doing little to reduce the District's staggering rate of chronic disease.
For more than a week, university President H. Patrick Swygert did not respond to repeated telephone or e-mail requests to discuss Howard's role, commitments and funding. A spokeswoman released a three-paragraph statement Wednesday afternoon that noted, "We understand the interest in this important undertaking, but until all the negotiations are complete questions regarding the status of any area are either premature or hypothetical."