Detroit Hope Hospital

When it closed its doors for good in January of 2010,1 Detroit Hope Hospital was the last of its kind in Detroit – a hospital owned by minorities, which focused on the healthcare needs of minorities.

Park Community

Dr. David Friedman, a graduate of Wayne State University, saw the need for such a hospital first hand at his family practice in Detroit through the 1940's. At that time a black patient could be refused care at the major hospitals of the city, leading to the creation of a separate network of black-owned medical clinics and hospitals.2 In 1952, Friedman opened Park Community Hospital in a converted house on the corner of Virginia Park and Third Streets, aiming to serve patients overlooked by the major hospitals.3 The number of patients using the hospital grew as the neighborhood integrated, and in 1959 a new wing was built onto the back of the house facing Third Street.4

By 1966, Park Community had outgrown the converted house, and decided to expand again. The house on Virginia Park was demolished, and construction on a modern four-story hospital building began in 1968.5 On its completion in 1970, the new Park Community Hospital was hailed as "one of the city’s most attractive and well kept medical facilities" by the Detroit Free Press.5 The new building, along with the 1959 addition increased the number of patient beds to 100, boasting modern amenities like private rooms, telephones, and a nurse's station on each floor.5 But even while the new facility was being hailed in the press, the hospital almost immediately ran into serious financial problems that threatened to close the hospital shortly after reopening.6

The hospital faced two major issues: The first was a saturated healthcare market, brought on by new hospital construction in the late 1960's. As early as 1966, the Hospital Council to Blue Cross had recommended against expanding Park Community Hospital, as the additional beds it would provide would not be needed.6 The second was issue was the desegregation of hospitals mandated by Title VI of the Civil Rights Act of 1964, which made it illegal for a hospital to deny someone healthcare based on the color of their skin. Smaller minority hospitals had difficulty competing against the larger institutions, which could offer more services and lower prices.7 A dispute with Blue Cross in 1971 about how many hospital beds the insurance company would cover nearly forced the hospital to shut down, and was only averted by a last-minute agreement.6

New Center

Through the 1970's Park Community Hospital continued to serve the neighborhood of Virginia Park, but struggled to remain profitable. In 1984, the hospital board elected corporate accountant Tom Barrow as their chairman, and tasked him with sorting out the finances of the hospital. After finding financial irregularities, Barrow effectively seized control of the hospital by replacing the board, and enlisting Detroit Police, hospital security, as well as hiring 14 Pinkerton guards to keep them out. The hospital was renamed New Center Hospital, and Barrow began overhauling its operations to make it profitable.8 Construction on the final addition to the hospital started in 1983 or 1984 on a wing that housed operating rooms, an intensive care unit, and a recovery ward.4

Despite initial promises to run the hospital more efficiently, Barrow's tenure at New Center was troubled. Through 1988 and 1989, problems with Medicare funding and overpayments to the hospital led to the Department of Housing and Urban Development to take over the mortgage and threaten to foreclose on New Center, which owed $700,000 in back payments.9 Barrow also came under scrutiny as he ran for mayor of Detroit in 1989, with questions about his management of the hospital dogging him throughout the campaign. An investigation by the Detroit News found that Barrow used $62,000 in hospital funds to buy billboards that were supposed to promote a health care program for expecting mothers, but featured his name and portrait prominently in much larger print.10 He lost the election to the incumbent, Coleman Young.

Another investigation by the Detroit Free Press in April of 1989 revealed that efforts to cut costs at the hospital might have put patient lives at risk.8

“While unable to pay its supplies, for instance, New Center Hospital began inviting as many medical equipment salesmen as possible to lend the hospital machines on a pay-later basis, even though a former administrator said the hospital had no plans to purchase the machines… One patient was already prepped and ready for surgery when, “all of a sudden this salesman comes in and says ‘I can’t do it anymore, Dr. Brown, this is it,’” and reclaimed his company’s co-oximeter – a blood gas monitor – sad Dr. Richard Brown, New Center’s former assistant hospital administrator… 8

On another occasion, a patient nearly died when the hospital ran out of an anti-seizure medication and it’s supplier refused to provide more because the hospital wasn’t paying its bills. They only relented after an administrator offered to pay for it with a personal check out of desperation.8

By 1990, the Federal government was investigating over $3 million dollars in questionable expenses at the hospital, including $500,000 paid to Tom Barrow and his accounting firm.11 Barrow stepped down in June of that year, as it was found that businesses with close ties to the hospital chairman had received $400,000 in contracts for work at the hospital.12 He would eventually go to jail in 1995 for tax evasion and fraud, serving 18 months.13

Facing continued financial problems, New Center laid off staff in December of 1991, and stopped performing surgeries and some medical tests.14 The hospital filed for bankruptcy in April of 1993, owing over $2.7 million dollars to creditors.15 For the next three years the hospital operated on a very limited basis under a bankruptcy trustee, before being sold for $2.2 million dollars in 1996 to Dr. Ramsay Dass, a physician with a private practice in the suburbs.16

Renaissance

The new owner had some things in common with the Dr. David Friedman, founder of the hospital. Dr. Ramsay Dass practiced medicine in countries around the world before moving to Detroit in 1983 and starting a private practice. He too was moved by the plight of the underprivileged and overlooked residents, and constantly sought new ways to reach the poor. His vision for New Center Hospital was to provide culturally sensitive care to the area’s African, Arab, Chaldean, and Asian patients. He bought the hospital in 1996 by pooling his own money with friends, family and colleagues.17 The name was changed from New Center to Renaissance Hospital, and remodeling began in earnest.18

Dr. Dass faced challenges, however. The Detroit Wayne County Community Mental Health Agency, which contracted with Renaissance Hospital for inpatient psychiatric care, grew concerned about the condition of facilities and management of hospital funds. In 1999, the agency terminated its $1 million dollar contract with the hospital, effectively cutting off its main source of funding and forcing it to close.16 Over the next few years, the hospital operated a medical clinic out of the first floor as Dass sunk an estimated $3.2 million dollars on improvements and renovations into the building, eventually taking over full control of the hospital from his partners.19

Detroit Hope

When the hospital finally got permission to reopen in late 2005, it changed its name one last time, from Renaissance to Detroit Hope Hospital. The name change reflected Dr. Dass's hope for the neighborhood and the city, as well as a practical concern: “Renaissance was a difficult name to spell or pronounce to lots of uneducated people in Detroit. So we said what is the most important thing? Hope. It's a good, positive four-letter word.” City and state officials including Mayor Kwame Kilpatrick attended the grand opening on December 15th, 2005.19

By this point, Detroit Hope was the last independent, minority-owned hospital left in the city. Greater Detroit Hospital closed in 1999, and United Community Hospital in southwest Detroit was in the process of being liquidated by the State of Michigan. Detroit had lost 20 primary care clinics and five community hospitals since 1985. In this chilly business climate, Dr. Dass hoped to succeed where other hospitals had failed by reducing overhead and administrative costs, collecting a higher number of payments from government health programs by helping enroll patients who qualified for those programs, and working with pharmaceutical companies to get patients enrolled in free and low-cost programs. The projected cost of a stay at Detroit Hope was $550 a day, versus $4,000 a day at other nearby hospitals. By focusing on patient needs, and being sensitive to different cultural norms in the ethnically diverse neighborhood of Virginia Park, Dass hoped the hospital would attract more patients.19 Detroit Hope also relied heavily on volunteers to help run the hospital and its many programs, including family and primary care, hospice, psychiatric care, spiritual care, food and clothing, tutoring and GED preparation.20

For several years, the hospital carried out his mission as Dr. Dass poured time and money into keeping it going. But the cost-cutting practices that saved the hospital money ran afoul of state regulators, who demanded that Detroit Hope increase staffing levels to meet national guidelines. Meanwhile, Crain's Detroit Business reported in 2009 that other hospital administrators had doubts about the viability of the hospital, as there was a surplus of available hospital beds throughout the city.21

In 2009, the hospital lost its Medicare accreditation because “the institution… was not in substantial compliance with all Medicare conditions of participation for hospitals.” The state Department of Community Health imposed a ban on new patient admissions in July because of noncompliance issues. Despite appeals by the hospital, in January of 2010 the DCH revoked the hospital and psychiatric licenses from Detroit Hope Hospital citing violations including lack of a registered nursing director, staffing issues at the urgent care center, and not having a board of trustees that regularly reviewed hospital operations.1 The loss of these licenses closed the hospital for the last time. Having spent nearly $6.6 million dollars on the hospital since 199621 and worn out by constant fighting with state officials, Dr. Dass returned to private practice, planning to continue his outreach efforts on a smaller scale.

This was not the first time that Detroit Hope or its previous names had closed. As with other hospitals, like United Community, Detroit Osteopathic, and Greater Detroit, the facility had closed and reorganized itself several times in the past, so much of the medical equipment was left inside under guard. But this closure, coming in the midst of a boom in the price of metals made the building an attractive target for scrappers. In 2011, a pipe burst in the basement, flooding the radiology, mortuary, kitchen, and cafeteria areas. Parts of the basement and the 1959 wing were gutted due to the damage. In 2013, the hospital property went into foreclosure for non-payment of taxes, and the security guards were laid off in May. In just a few weeks scrappers tore the building to shreds, ripping out wire, pipe, window and doorframes, equipment, as well as anything of value.

Citations

1: Michigan Department of Community Health, 2010
2: http://prognosis.med.wayne.edu/article/david-friedman-class-of-1941
3: Greene, J. 2011 "Inside the mind of a journalist..." Crain's Detroit Business
4: Sanborn Fire Insurance Maps, Detroit Mich Volume 9 Sheet 82, 1991
5: Good, D. (1971, January 5) Blue Cross limit threatens new hospital. The Detroit Free Press, p 4B
6: Glimmer of hope looms for hospital. (1971, January 7) The Detroit Free Press, p 13A
7: http://qed.econ.queensu.ca/paper/chay.pdf
8: Chargot, Patricia; Wagner, Michael G. (1989, April 9) Hospital staff: Care declined under Barrow. The Detroit Free Press, p 1
9: Jackson, K. (1989, September 18th) Barrow's Record Revisited. Crain's Detroit Business, p 1
10: Scott, Vance N. (1989, April 12th) Hospital Paid Barrow $17,700 for His Services. The Detroit News, p A1
11: Cannon, Angie. (1990, January 30th) HUD Audit Targets Barrow. The Detroit News
12: Cannon, Angie. (1990, July 25th) Barrow Tied to Insider Deals. The Detroit News, p A1
13: Lengel, Allan. (1995, June 6th) Barrow gets 21 months for tax evasion, fraud. The Detroit News, p 12D
14: Chandler, Michelle. (1992, June 27th) Hospital Union Sues to Stop Shift of Pension Funds. The Detroit News and Detroit Free Press, p B7
15: Raphael, Steve. (1995, June 19th) Texas Firm Poised to buy Detroit Hospital. Crain's Detroit Business
16: Kennedy, Sheryl. (1999, July 7th) Wayne County ends contract, puts local hospital in a bind. The Detroit News, p 1C
17: Bates-Rudd, Rhonda. (2000, January 12th) Dr. Dass' delivery: Renaissance Hospital. The Detroit News, p 6S
18: Amick, Marcus. (1996, September 4th) Breaking new ground in community health care. The Michigan Chronicle, p 1A
19: Merx, Katie. (2005, December 15th) Hope hospital to note opening. The Detroit Free Press
20: Lockhart, Valerie D. (2007, April 18th) Volunteers spread Hope throughout the community. The Michigan Chronicle, p B10
21: Greene, Jay. (2009, January 11th) Detroit Hope Hospital cuts costs to serve poor. Crain's Detroit Business