District of Columbia hospitals have two different tales to tell

A hospital corridor

As the District of Columbia changes, so does the financial landscape for its hospitals.

The Atlantic magazine has reported that while some neighborhoods have prospered in recent years, others remain mired in high levels of poverty, creating different financial playing fields for the hospitals that serve those communities.

Despite the expansion of Medicaid eligibility in the area as part of the Affordable Care Act, the article notes that there are fewer hospitals and other medical providers in the city's poorer neighborhoods. Conversely, those hospitals are also struggling financially compared to their counterparts in wealthier areas.

That's despite the fact that 92 percent of its residents are insured, nine percentage points above the national average. Its ratio of 5.4 hospital beds per 1,000 residents is also above the nationwide average.

“When you're in an urban area there's a lot of competition,” Michael Masch, chief financial officer of Howard University, which operates Howard University Hospital, told the Atlantic. He noted that as a non-profit standalone hospital, it can only rely on the bond market as a source of revenue. Its financial problems make it more expensive to issue and service bonds. “Nonprofits only have the ability to raise investment capital through debt, and bonds are very clunky,” he said.

The healthcare financial issues in the District of Columbia in some ways echo what is going on in states that chose not to expand Medicaid eligibility under the ACA. Hospitals in those states are also struggling financially, with their bottom lines affected by lower levels of revenue.

Moreover, there is a huge gap in life expectancy within the area. In its second ward, which is 70 percent white, the life expectancy is 86 years. In the nearby Ward 8 on the other side of the Anacostia River, which is 94 percent black, the life expectancy is just 70 years--a nearly 20 percent differential. Access to different hospitals explains more than half of the racial disparities seen in healthcare delivery.

That leads hospitals like Howard to offer more basic healthcare services such as straightforward surgeries, while the hospitals in wealthier neighborhoods can offer more expensive specialty services and have an easier time recruiting physicians, exacerbating both the demographic trends for the communities they serve and their own financial gaps. And some hospitals have to treat a preponderance of homeless patients, making it difficult to discharge them when they have no place to return to but the streets.

- read The Atlantic article