History of Hospitality

Durham Regional Hospital's progenitors were two hospitals founded in the midst of segregation--Watts Hospital opened its doors for white patients in 1895 and Lincoln Hospital, founded in 1901, served Durham's black community.

The two hospitals, with their separate nursing schools, co-existed for about half a century until the 1960s brought the civil rights movement and increasing racial integration to both hospitals. The era of social change, coupled with two deteriorating facilities, prompted city leaders to seek a more efficient way of providing health care to a growing region.

Their solution arrived in 1968 when a $20 million county bond referendum created the Durham County Hospital Corporation, subsequently uniting Watts and Lincoln when they each joined the corporation in the early 1970s.

Trustees at both hospitals focused on creating a new facility at Durham Regional's current location on Roxboro Road, and on Oct. 3, 1976, Durham County General Hospital dedicated its new 487-bed, seven-story facility to the continued health of Durham citizens.

Durham County General continued to grow, and by the 1990s, its coverage area had enlarged enough to warrant a name change to Durham Regional Hospital, which reflected its additional service to Durham's neighboring counties.

Though Durham Regional continued to expand its services and programs, the hospital began to fall into the red. In addition to reimbursement changes and bill collection problems, Durham Regional's commitment to supporting community health organizations led to falling profit margins.

"Although [Lincoln Community Health Center is] a federal-funded, federal-sponsored health center, we provide approximately $5 to $6 million of support annually," says Richard Liekweg, chief executive officer of Durham Regional. "In addition, we provide about $1.5 million of support to local EMS services. Community hospitals don't typically provide funding to EMS. If you were to compare us to another 400-bed community hospital, you would not find those types of expenses."

In the mid-1990s, Durham Regional began to search for a partner to help ameliorate its financial woes and provide more efficient health care to the community. It decided that Duke University Health System would be the ideal match.

"Financially, it's been a burden," Snyderman says. "We found, much to our dismay, that numbers given when we contracted for the lease were overstated as far as the economic value of Durham Regional, and we have been working very hard to maintain its economic viability. We're not out of the woods yet, but we've made progress."

The agreement has resulted in the consolidation and redistribution of certain services between the two health-care entities, as well as other cost-saving strategies for both.

"We're purchasing as a health system now, rather than as two individual hospitals," Galbraith explains, adding that the two organizations have also attained better reimbursement from insurance companies since they are no longer competing with one another for managed-care contracts.

"[The] partnership with Duke health system has gotten us better pricing on supplies and pharmaceutical products, better leverage and better buying power," Liekweg says. "That's on the expense side. On the revenue side, there are greater improvements in making sure we're billing for services we render and collecting for services we render."

In the past year, the hospital's budget--which hit a $16.9 million deficit for the 2000 fiscal year--has made steady improvement, cutting its losses to $7.5 million last year and projecting only a $1.7 million loss for this year.

"We've made progress in the last couple of years by being more productive with resources we used [and] how we staff the hospital," Liekweg says.

Part of the evaluation of resource productivity came at the expense of the Oakleigh Substance Abuse Treatment Center and Northgate Mall's Senior Health Center, which were both closed last spring.

"The few programs we closed were based on actual cuts in funding at the federal level as well as the state and local levels," Liekweg says. "We don't take it lightly when we close those programs, and we make sure there are alternatives in treatment."

Despite the economic stumblings, Durham Regional's officials are for the most part satisfied with and optimistic about their partnership.

"If we had to do it all over again, I think we would have done it differently in terms of financial arrangements and how we paid for it.... But what's past is past, and [Durham Regional] is a fully comprehensive institution that provides excellent health care, as it did before," Snyderman says. "From Duke's point of view, I think [the partnership] has clearly benefited people of Durham by continuing their access to community health care."

Galbraith agrees. "If a for-profit company had come in and taken Durham Regional rather than a Duke-Durham partnership, many people would have contended there would not have been that same level of commitment to community," she says.

A century ago, Durham Regional's predecessors were the two premier local institutions providing health care to their respective communities. Today, the hospital continues that mission.

"We've been a community hospital for 25 years," Galbraith says. "That's what we're really known for: personal care, ensuring quality and trying to be the hospital of choice for consumers in this area."

Under the leadership of Liekweg, who has been on the job since former CEO Richard Myers retired in 2000, the hospital prepares to move into its next quarter-century with a focus on growth of service quality in the face of nationwide challenges.

Liekweg says that in the official recession, the numbers of the uninsured and underinsured will grow. Durham Regional will also experience cutbacks and reductions through managed care and Medicaid.

The national labor shortage is another problem. The recruitment and retention of clinical and medical staff is a major priority. "[It] clearly is a focus for us to make sure we have a working environment attractive to new and current employees, to grow our services," Liekweg says.

Another recent challenge is the role Durham Regional will play in being prepared for bioterrorism. Liekweg says that the American Hospital Association estimates a $10 to $11 billion cost to prepare hospitals to be one of the first responders in case of emergency.

"We're already working in partnership with the health system and Durham County emergency medical services. One concern is to respond and the other is to protect the workers who will respond," Liekweg says.

Durham Regional will also continue to focus on improving its financial position, updating facilities and information technology. According to Liekweg, 80 percent of the hospital's facilities have not been significantly renovated since their original construction.

With nearly 20 years of partnership with Duke ahead, Durham Regional maintains its focus of providing quality health care to the community--a tradition that began with Watts and Lincoln nearly a century ago.

The evolution from two segregated community hospitals to an institution serving a broad multi-county region has not been easy. Durham Regional's partnership with Duke has been a lifeline, and the alliance's first three years have been spent pulling the hospital out of its financial hole.

If all goes according to plan, at the end of 20 years, Durham Regional will be a self-sufficient hospital, able to adapt to and provide for the needs of its growing community. For the time being, cautious expansion and attention to practical concerns may help that dream become a reality.