Howard University Hospital is in the black with a $4 million surplus after years of struggling to operate and be profitable.
On Sept. 20 at the Founders Library, Howard University President Dr. Wayne A.I. Frederick announced that the hospital is going through a significant financial and operating rebound. The hospital is operating with a solid bottom line as a result of the work of the university officials, the hospital’s managing firm Paladin Healthcare, and the staff and management at the facility, he said.
Howard University Hospital is the only teaching hospital located on the campus of a Black university. (Photo by LaTrina Antoine)
“Over the past two years, Howard University and Paladin Healthcare have embarked on a large-scale strategic restructuring plan for the hospital,” Frederick said. “Howard University is emerging as a stronger institution. We will always be grateful to the people of the District of Columbia and to our employee groups for helping us preserve top-quality care to the community we serve.”
Highlights from the hospital’s performance on June 30, the end of the 2016 fiscal year, include revenue growth from patient services increased from $17 million to $233 million, an increase of 8 percent; operating expenses were $238 million, down 8 percent; and the hospital’s market share stabilized to 7.2 percent. The hospital’s previous profitable year was 2012. In May the hospital announced it was laying-off 110 people, or about 10 percent of its workforce.
Howard Hospital has a rich history. It was started in 1862 as a facility for Blacks and then formally became the teaching hospital for the newly-minted Howard University Medical School, established in 1868.
The facility, known as Freedmen’s Hospital, trained hundreds of Black doctors in the late 19th and early 20th century. For years, it was the premier training ground for Black doctors who came from all over the world to study. Freedmen’s was formally transferred over to Howard University in 1967.
Howard Hospital is the only teaching hospital on the campus of a Black university. Despite its success and longevity, the hospital has struggled in recent decades due to the rising costs of operation, its mission of treating low-income patients who may not be able to pay for services, and competition for staff and doctors from other health institutions.
Michael Masch, Howard University’s chief financial officer, said the hospital lost $58 million during the 2014 fiscal year, just before Frederick over as president in July 2014. “We immediately began to focus on turning the hospital around,” Masch said. “We began to reduce expenses in line with revenues but did not compromise on the quality of care. We also began, like other hospitals, to discourage in-patient admissions and stress out-patient services and we right-sized the hospital .”
Masch said that for the fiscal year 2015, the hospital posted a $19 million loss and said that it should be $4 million in the black, an unaudited view.
Frederick said the hospital will continue to expand its outreach to residents east of the Anacostia River, even though it is located in the western part of the city. “We increasingly see residents from Ward 7 and 8 come to our hospital,” the president said. “East of the River residents have a significant need for specialty care and we will have more of a presence of our ambulatory service.”
However, Frederick makes it clear that the hospital’s goal isn’t to supplant the United Medical Center. “We are not there to compete with UMC but to enhance the services to the community,” he said.
Although the hospital has some of the country’s top surgeons such as Dr. Clive Callender and Dr. LeSalle D. Leffall, there is a perception by some District residents that it is an unclean facility with rude staff. Frederick takes issue with that perception and has a strategy to combat it. “We can get around that perception with good performance,” Frederick said. “We want the patients to see the best we have to offer. Paladin has made it a priority for patient satisfaction and we are improving our delivery of care.”