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Adventist signs deal to take over management of Howard University Hospital

Howard University Hospital has signed a three-year management deal with Adventist HealthCare that grants the network oversight of the medical center’s operation.
Howard University Hospital has signed a three-year management deal with Adventist HealthCare that grants the network oversight of the medical center’s operation. (Marvin Joseph/The Washington Post)

Howard University Hospital has signed an agreement with Adventist HealthCare to manage the hospital’s operation as an initial step toward a possible acquisition and replacement of the troubled medical center, officials announced Thursday.

Wayne A.I. Frederick, Howard University Hospital’s president, said that he wanted to reassure the community that the new arrangement will strengthen the teaching hospital’s historical mission of training African American physicians and preparing undergraduates for medical school while providing care for some of the city’s poorest residents.

“When we were picking a partner, we wanted to make sure they would not just respect our mission, but enhance it,” Frederick said after a news conference announcing the move. About 88 percent of Howard’s patients are covered by Medicare or Medicaid. At the same time, the school pro­duces more African American medical school graduates than Harvard University, Yale University or the Massachusetts Institute of Technology combined.

For Adventist, the three-year management deal creates the regional system’s first affiliation with an academic institution and opens the door to possibly acquiring its first hospital within the District.

Adventist, based in Gaithersburg, Md., hopes to expand the locations where Howard University students can work and train, said Terry Forde, president and chief executive of Adventist HealthCare.

The deal would see Howard University Hospital integrated into a medical care system with Adventist’s more than 6,000 employees and 1,700 physicians, and facilities that include Shady Grove Medical Center, White Oak Medical Center and Fort Washington Medical Center.

“We’re a local system,” Forde said. “We’ve been here for a hundred years. We understand the region well.”

Anita L.A. Jenkins the former president of Sycamore Medical Center, which is part of the Kettering Health Network and located near Dayton, Ohiowill take over as Howard University Hospital’s chief executive. Neither Frederick nor Forde would discuss the cost of the management services agreement, which takes effect Feb. 17, or a possible timeline for an acquisition and replacement of the hospital. Officials said a letter of intent on the agreement was signed in July.

D.C. Mayor Muriel E. Bowser (D) issued a statement praising the agreement. The announcement comes as the city has tried to minimize its direct role in establishing public hospitals but also manage and maintain health-care facilities that will serve its residents, particularly in poor neighborhoods.

The District’s only public hospital, United Medical Center in Southeast Washington, is scheduled to close in 2023, and plans to build a smaller replacement are years from completion.

The city dropped a lawsuit last year that was the last obstacle to a nonprofit health-care chain’s decision to close Providence Hospital in Northeast Washington.

Howard University Hospital was founded in 1862 as Freedmen’s Hospital and became known for providing high-quality medical care to formerly enslaved people and top medical training for African American physicians.

Howard University Hospital shows symptoms of a severe crisis

But the hospital’s problems increased and its reputation began to plummet about the time D.C. General, the city’s only public hospital, was closed in 2001. With that, Howard University Hospital became the city’s de facto public hospital, absorbing a heavy financial burden while providing care for many of the city’s poorest residents.

Mismanagement worsened the situation, as the hospital struggled to collect its bills and maintain accreditation. The District cited the hospital often for violations of the hospital’s own policies, with regulators documenting lax oversight of medical residents and inoperable emergency equipment.

Between 2007 and 2017, the hospital paid out at least $27 million in malpractice or wrongful-death settlements.

The hospital’s financial problems also became a drag on Howard University’s finances and a key reason Moody’s Investors Service downgraded the school’s credit rating several times. A decline in medical insurer reimbursements and fewer patients between fiscal 2013 and 2016 resulted in a $19 million hit to the university’s bottom line.

“Despite its important role in the district, the hospital is financially challenged by a myriad of issues including a high Medicaid population, tightening reimbursement, aging facilities, increasing market consolidation and intensifying competition, and past disruptions resulting from changes in hospital leadership,” Moody’s credit officer Dennis M. Gephardt wrote in his most recent report on Howard.

Critics over the years said the hospital’s executives should have been more aggressive in pursuing a possible sale. Some in the university community, however, say the teaching hospital remains an invaluable asset for the school.

On Thursday, Frederick said rising health-care costs and the search for economic efficiencies forced the small hospital to search for a bigger partner.

If anything, he said, the hospital — which became part of the historically black university in 1962 — had held out against rising costs longer than other university hospitals in the city, but low volume and punishing reimbursement rates had finally forced it to combine with a larger health-care system, Frederick said.

“Hospitals our size just cannot survive,” he said.

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