Emergency room treatments on rise

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The six hospitals that are paid by the D.C. government to treat poor people had far more emergency room patients last year than they did before D.C. General Hospital closed in 2001.

But the hospitals' financial reports are not clear about how their participation in the D.C. Healthcare Alliance -- a $500 million public-private partnership to provide medical services for low-income residents -- has affected the hospitals' bottom lines.

Three of the six alliance hospitals reported declining profits last year, while the others showed improved earnings, according to annual financial reports from the D.C. Hospital Association.

The alliance, which arose in 2001 after the closing of the District's primary health care provider for the poor -- D.C. General -- is comprised of Children's National Medical Center, Howard University Hospital, Providence Hospital, Washington Hospital Center, George Washington University Hospital and Greater Southeast Community Hospital.

Children's National saw the biggest increase in emergency room visits, with 47,707 ER patients in 2000 and 62,408 last year -- a 31 percent increase. The hospital's profit margins grew from 0.04 percent in 2000 to 0.36 percent last year, while spiking at 2.69 percent in 2001.

Greater Southeast, which became the alliance's primary facility, had 37,429 ER patients in 2000 and 43,554 last year -- a 16 percent increase. The hospital's profit margins fell from 1.26 percent in 2000 to -9.27 percent last year. Greater Southeast is undergoing its third bankruptcy in five years.

The effect of treating the poor on the alliance hospitals' finances is clouded by the findings of a report by the Center for Studying Health System Change. The D.C.-based think tank found that insured patients increasingly are using emergency rooms, even for non-urgent care, around the nation.

Emergency room visits jumped to an average of 107.7 million a year in 2001 and 2000, up 16.3 percent from 1996 and 1997, and most of the increase is attributable to insured patients, the center reported this week.

According to the center's study, privately insured patients' use of the emergency room rose 24.3 percent to 43.3 million visits over that six-year period. People covered by Medicare, the government insurance for the elderly, visited the ER 16 million times, a 10 percent increase. Visits by uninsured patients rose 10.3 percent to 18 million, while those by patients covered by Medicaid, the government program for the poor, were flat at 18.4 million.

Still, treating the poor in the District has had its costs.

The D.C. Healthcare Alliance paid out $97 million last year to cover the medical expenses of low-income patients and is expected to pay out at least as much this year and next year. About two-thirds of the money last year went to hospitals, according to the D.C. Health Department.

Meanwhile, George Washington University Hospital's administrator has threatened to leave the alliance, Greater Southeast may close this week because of regulatory failures, and negotiations between the D.C. Hospital Association and city officials have stalled for more than a year.

"There are two ways to serve the uninsured and the under-insured -- [a private health care system for low-income patients, or a publicly funded hospital]," -- said Robert Malson, executive director of the D.C. Hospital Association. "Both options can work, but neither will work if they're underfunded or clogged down with unnecessary administrative bureaucracy."

D.C. Health Department officials defend the alliance, saying it never was intended to be a hospital-based program in the first place. The officials also are leery of increasing funding for the alliance.

Health Director James A. Buford told the D.C. Primary Care Association on Friday that the alliance's "growth has been on the wrong end," noting the addition of three hospitals last year. "The growth has been on the hospital end," he said.

Mr. Buford said Greater Southeast's financial problems may force officials to consider opening a new hospital.

"There very well may be a need for a new hospital on the campus of D.C. General," the health director said. "We may very well be moving in that direction sooner or later."

• This article is based in part on wire service reports.