Selling Teaching Hospitals and Practice Plans: George Washington and Georgetown Universities

281 Pages·2008·1.53 MB·English

by  John A. Kastor MD

Selling Teaching Hospitals and Practice Plans
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Selling Teaching Hospitals
and Practice Plans
George Washington and
Georgetown Universities
John A. Kastor, M.D.
Professor, Department of Medicine
University of Maryland School of Medicine
Baltimore, Maryland
The Johns Hopkins University Press
Baltimore
∫ 2008 The Johns Hopkins University Press
All rights reserved. Published 2008
Printed in the United States of America on acid-free paper
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Library of Congress Cataloging-in-Publication Data
Kastor, John A.
Selling teaching hospitals and practice plans : George
Washington and Georgetown Universities / John A. Kastor.
p. ; cm.
Includes bibliographical references and index.
ISBN-13: 978-0-8018-8811-3 (hardcover : alk. paper)
ISBN-10: 0-8018-8811-5 (hardcover : alk. paper)
1. Teaching hospitals—Washington (D.C.)—Administration.
2. Teaching hospitals—Washington (D.C.)—Finance. 3. Academic
medical centers—Washington (D.C.)—Administration.
4. Hospitals—Ownership—Washington (D.C.) 5. George
Washington University. Medical Center. 6. Georgetown
University. Medical Center. I. Title.
[DNLM: 1. George Washington University. 2. Georgetown
University. 3. Academic Medical Centers—organization &
administration—District of Columbia. 4. Financial
Management—District of Columbia. 5. Hospital Restructuring—
District of Columbia. 6. Practice Management—District of
Columbia. WX 27 AD6 K19s 2008]
RA975.T43K376 2008
362.1109753—dc22 2007038399
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To the memory of Ged Bentley
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Contents
Preface ix
1 Washington and Its Academic Medical Centers 1
2 George Washington University: Selling the Hospital 5
3 George Washington University: Separating the Practice Plan 23
4 George Washington University: Closing the HMO 44
5 George Washington University and Its Medical School 49
6 Georgetown University: Selling the Hospital 80
7 Georgetown University: Selling the Practice Plan 108
8 Georgetown University and Its Medical School 128
9 MedStar Health 146
10 Conclusions 171
Appendix A: Other Universities with Teaching Hospitals Owned
by For-Profit Companies 183
Appendix B. Reducing Deficits and Increasing Surpluses in
Private Medical Schools That Do Not Own Their Primary
Teaching Hospitals 192
Appendix C. Interviewees 204
Notes 233
Index 255
Photographs follow pages 79, 145, and 170.
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Preface
When academic medical centers lose money, ‘‘attention must be paid.’’ Two
such institutions that found themselves floundering in red ink in the 1990s
were the medical enterprises at George Washington (GW) and Georgetown
universities, both in Washington, D.C. At their worst, GW lost $52 million
in a three-year period during the decade, and Georgetown lost $83.1 mil-
lion in 1999 alone.
Unable to repair the losses by themselves, both decided to sell their
teaching hospitals—the biggest source of their troubles—and separate from
the practice plans for their full-time faculties. Was this wise? What have
been the effects of these decisions?
To answer these and other questions, I interviewed 335 people (see ap-
pendix C), some more than once, on the telephone, in their offices, or via
e-mails, as I have done for my previous studies of academic medical cen-
ters.1-3 I recorded what they told me by taking notes, not with a recorder. I
sent all those interviewed drafts of what I wrote about them for correction
and revision. This technique reduced the number of mistakes this book
might otherwise contain and gave my interviewees the security of knowing
that they would not see in print information they gave me in confidence. In
some cases, they let me retain what they said but requested not to be identi-
fied as the source.
My journalist daughter, Elizabeth Kastor, has taken me to task for using
this technique. The first time that most people interviewed for newspapers
or magazines see what they have said is when they read about it. That
would not work for my reports. Many of the sources would have remained
silent if they had been unable to review the text that included their re-
marks. With this technique, almost everyone I contacted talked with me.
Perhaps knowing that their interviewer was a fellow medical academic also
put them at ease.
The book consists of ten chapters and three appendixes. In chapter 1, I