Georgetown University Hospital has made a major financial turnaround in the past two years, ending fiscal years 2005 and 2006 with a combined operating profit of $28 million, after years of operating losses.

The university sold the hospital to MedStar Health in 2000, citing financial concerns, after the Medical Center lost over $200 million over the previous three years, in part due to losses at the hospital. The Medical Center lost $83 million during the 1999 fiscal year alone.

Joy Drass, who became the hospital’s president and chief executive officer in 2002, said the hospital has changed direction under MedStar, adding that the hospital has focused particularly on economic efficiency. She said that the hospital has “benefited by being part of the MedStar system.”

MedStar runs seven hospitals in the mid-Atlantic region.

“The hospital developed a strategic plan in July 2000 focused on specific programs and new technology … and has been structured in following that plan,” Drass said.

The hospital has gradually cut its losses since being acquired by MedStar. In 2005, the hospital reported a $5 million surplus. The surplus grew in fiscal year 2006 to $23 million. Access to edStar’s administrative resources, particularly in negotiating payments and contracts, has enabled the hospital to cut its losses, Drass said.

Stuart Bondurant, interim executive vice president for health sciences, said in a statement provided by Medical Center spokeswoman Laura Cavender that the hospital’s recent financial success will also benefit Georgetown’s Medical Center, since it is closely affiliated with the hospital.

“As the hospital succeeds, research and education improves at the Medical Center, and the functional aspects of the partnership are strengthened by unilateral strength from either partner,” Bondurant said.

Ken Samet, president and chief operating officer of MedStar, said that he is pleased with the financial development that the hospital has seen under Drass.

“We are very proud of Joy Drass and our leadership team at Georgetown University Hospital. Working with their MedStar partners, they have not only strengthened the hospital for those that depend on it today, but also for all those who will benefit from the world-class care and medical advances that will occur in the years ahead,” Samet said.

Drass said that she expects the financial success to continue during the 2007 fiscal year. Barring any unforeseen difficulties or problems, the hospital is projecting a surplus of $17 million.

“All of us here at the hospital are pleased that we have completed a financial turnaround and are pleased to be helping the greater Georgetown community,” she said.

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