Demand for medical services grows in U.S. capital

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Rapid population growth and increased demand for medical services have health systems battling for market share in affluent areas of Washington, D.C., according to a newly released report from HealthLeaders-InterStudy, a provider of healthcare market research.

"Watch for competition to continue among health systems looking to serve rapidly growing counties outside of the District," states Josh Kelley, market analyst for HealthLeaders-InterStudy and author of the report. The competition is illustrated by the number of mergers and acquisitions occurring in those areas, he said.

Kelley said the jockeying for market share is most pronounced in Virginia's Loudoun County, which added nearly 100,000 residents, many of whom earn above-average wages. Inova Loudoun Hospital is the county's only hospital, and Inova has been battling aggressively to keep it that way. The health system has repeatedly appealed decisions by courts and state regulators to allow Hospital Corporation of America to construct its proposed medical center in Ashburn, which is only a few miles from Inova Loudoun, Kelley said.

In a deal that is currently under review by the Federal Trade Commission, Inova Health System also plans to merge with Prince William Hospital, Kelley said.

In related mergers, Montgomery County General Hospital in Olney, Md., announced in October 2007 that it was merging with MedStar. The 153-bed hospital has been struggling to keep pace with Montgomery County's four other hospitals in terms of size and services offered. Kelley said that hospital officials believe the merger will help the hospital expand and recruit physicians faster and could allow for improvements to the hospital's cardiovascular programs.