THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, August 18, 1996 TAG: 9608170479
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MARIE JOYCE, STAFF WRITER
LENGTH: 147 lines
Norfolk Community Hospital has always treated the disenfranchised.
It opened in 1915 to care for African Americans, who were not welcome at white hospitals.
When the color barriers started to crumble in the 1960s, wealthier white-owned hospitals took many of Norfolk Community's patients. The hospital, like its counterparts around the country, suffered. Of the approximately 500 original black hospitals in the United States, only five remain.
Lately, cuts in insurance reimbursement have put the squeeze on all hospitals, not just traditionally African-American institutions. Like many other hospitals, Norfolk Community started losing money.
Yet Norfolk Community may turn things around, due to a strategy that broadens their mission of serving patients on the fringes of society.
By starting new programs for jail inmates and poor people with mental illnesses, Norfolk Community earned a three percent profit in the last fiscal year, after finishing three years in the red.
Because it is a nonprofit, tax-exempt hospital, any money made is reinvested in the hospital.
The hospital also continues to offer general services, drawing about three quarters of its patients from nearby neighborhoods.
There are formidable obstacles ahead which could thwart Norfolk Community Hospital's plans for a comeback.
It still carries a million-dollar deficit from years in the red, and it has had trouble paying the bills. Much of its recovery strategy is based on federal government programs, like Medicaid, which could be cut by Congress. It serves many patients who can't afford to pay. And it has been faulted by the state for inefficiencies, such as inadequate use of high-tech equipment.
But the hospital leadership has plans. And so far, their plans have worked.
``We're just doing creative, health-related things for which there is a niche - and that are profitable,'' said Phillip Brooks, president of the 202-bed facility on Corprew Avenue.
One of the profitable endeavors goes on behind a locked door, rigged with high-tech security equipment and guarded round the clock by sheriff's deputies. There, prisoners from the Norfolk jail and other facilities recuperate from surgery or other treatments.
Two years ago, Norfolk Community saw an opportunity when the city of Norfolk fired Correctional Medical Services, the company handling health care for the city jail.
``We think it's everyone's right to adequate health care . . . and we think we can do it profitably,'' Brooks said.
Norfolk Community set up a full-service clinic at the jail, run by a doctor and featuring a 24-hour nursing staff to administer medications. Even follow-up appointments after surgery are handled there. When prisoners need intensive treatment, they are taken to the hospital's high-security ward.
The hospital's work has won praise from the city and led to contracts with other correctional facilities. They now provide some services to 12 correctional institutions, including the city jails of Virginia Beach and Portsmouth.
``They were able to take care of all the problems that they had inherited and handle the daily medical calls. They have done a magnificent job,'' Norfolk Sheriff Robert J. McCabe said.
In an unstable health care market, the prison contracts offer a steady source of revenue, Brooks said. Norfolk Community has been able to earn about 5 to 8 percent profit on the venture, he said.
The hospital also targeted another under-served group, mentally ill people on Medicaid, the government health insurance program for the poor. Two units have been set aside - one for adults and one for adolescents - and there are plans to add a program for the elderly. Although all the patients aren't Medicaid clients, a large portion are.
Until Norfolk Community stepped in, there were few local places for these people to get overnight treatment, said Paul M. Boynton, the executive director of the regional Health Systems Agency, a state-appointed group that regulates hospital expansion.
Medicaid regulations don't allow patients to stay in private hospitals exclusively for psychiatric care, and there weren't enough mental health beds in general hospitals to go around, Boynton said.
The federal government gives extra money to hospitals that take on an unusually large share of Medicaid patients. Norfolk Community treats a far greater proportion than any other adult hospital in Virginia, so it earns about $150 more per patient a day.
``They were very, very smart,'' Boynton said. Many other hospitals don't qualify for the program because they don't treat enough poor people.
The prison and the mental health program may have aided the hospital, but they pose a risk as well, Brooks said. Norfolk Community doesn't want to be seen as just a hospital for the mentally ill, or for prisoners.
To thrive, the hospital needs a base of patients on private insurance, Brooks said.
Almost half of the hospital's patients are Medicaid clients; the state average is 12 percent. Another 19 percent are not served by Medicaid, yet can't or don't pay for their care. Norfolk Community delivers a larger portion of free care than any hospital in Virginia.
Hospital leaders' plan to lure more privately insured patients is the same strategy used by other local hospitals: acquire doctors' practices and increase outpatient services to cope with managed care.
These efforts can be seen throughout the hospital.
On a typical day, Dr. Delores Flowers treats expectant mothers visiting her obstetrics practice, located in the hospital. Norfolk Community has opened a practice with six physicians in three Norfolk locations, and they plan to add up to 14 more doctors.
Across the street from the main building, Norfolk Community's new dialysis center boasts cutting-edge equipment and a television set at every chair to entertain patients.
Although most local hospitals try the same things, the tasks are harder for Norfolk Community.
Take the doctors' practice. Most local hospitals have bought established practices. Norfolk Community can't afford that, so they've recruited doctors and started from scratch. It's cheaper, but riskier.
The venture is too young to turn a profit, Brooks said. It lost about $121,000 in the last reported fiscal year.
Norfolk Community also plans to consolidate three outpatient surgery areas and create a convenient, attractive entrance. Construction probably won't start until the hospital has raised the needed $500,000. They'll save money by doing all of the first stage of improvements within the building's existing walls.
``We have to manage our debt very, very carefully,'' Brooks said.
Brooks and other hospital leaders know they've got a rough ride ahead. Norfolk Community ended the last reported fiscal year with a deficit of about $1.3 million, a hold-over from years in the red, according to their most recent tax return, filed last August.
Although the hospital has used recent earnings to whittle away at the deficit, they've had to delay payments to vendors at times and loan payments to the city.
The hospital has been faulted for inefficiency in a recent report from the state Cost Review Council. Among other things, the report said the hospital wasn't making good use of its high-tech equipment. Brooks says they're addressing that by consolidating departments and streamlining operations.
The biggest danger can't be controlled - the whims of government.
In the past year, Congress considered dropping the program that rewards hospitals with lots of Medicaid patients. The idea died, but the threat always looms, Brooks said.
Already, Norfolk Community suffers because of changes made this year in the local Medicaid program.
Government uncertainty ``is our greatest risk, quite frankly,'' he said. ``It's something you try to learn to live with.''
Brooks has watched other hospitals close or be sold. Nearby Newport News General - one of the other few remaining historically black hospitals - struggles with bankruptcy reorganization.
Norfolk Community remains a force in the city, he said. While some patients come from as far away as North Carolina, most from within the six zip codes around the the hospital.
``There's still a need for a Norfolk Community Hospital,'' he said. MEMO: Staff writer Larry Brown contributed to this story. ILLUSTRATION: BETH BERGMAN color photos/The Virginian-Pilot
ABOVE: Norfolk residents Barbara Robertson, left, and Teresa G.
Holloman receive their dialysis treatments at Norfolk Community
Hospital. BELOW: Benjamin Franklin Jones had been staying in the
hospital's mental health unit. by CNB