Industry Changes Put Financial Pressure on Washington Health Care Market

From 1995 to 1998, researchers at the Urban Institute conducted a study of the District of Columbia's 11 major acute-care facilities, focusing also on the Medicaid system and long-term care for the elderly.

The research team also explored the factors contributing to the local health care problems and provided guidance to policy-makers on how to facilitate change.

The Urban Institute, based in Washington, is nonprofit, nonpartisan economic and social policy research organization.

Key Findings

  • Two major factors were found to contribute to the financial woes:

    • The large number of uninsured residents. Although Washington has more hospital beds, doctors and nurses relative to its population than the nation as a whole, many city residents cannot take full advantage of those resources.

      The nearly 20 percent of residents without insurance often end up in hospital emergency rooms or were relegated to four hospitals willing to provide charity care.
    • Cost-cutting measures by insurers. Strong market pressures brought about by declining demand for care from insured residents in Washington facilities and reduced payments from insurers and managed care plans were straining hospitals financially.
  • The study warned that some hospitals might be forced to close, making it even harder for the uninsured to find care.