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If you read the Washington Post last week, you probably think the deathwatch is on for D.C. General Hospital. After all, the lead story in the Oct. 25 Post announced that the D.C. government is nearing a deal with Howard University: The troubled public hospital would close, and the university would inherit D.C. General’s 13,000-plus patients.
Hospital advocates expressed outrage at the prospect of D.C. General’s shutdown. “If D.C. General closes, you’ll need a shovel to clean up the dead people and sick people on the streets,” says Janice Vailes, a D.C. General union president and Ward 7 ANC commissioner.
There was only one problem with the Post‘s scenario, say high-ranking city officials: It’s not likely to happen. “There is no done deal on the future of D.C. General,” says City Administrator Michael Rogers. And while the city is considering the Howard plan, the plan is the most improbable alternative on the table.
The real D.C. General story is a lot murkier. After years of batting around consultants’ reports, District officials have finally decided to do something about the city’s health care crisis. The public hospital has racked up a deficit of more than $84 million—only 20 percent of its patients are insured or can pay for treatment—and Congress and the city are tired of dealing with the hospital’s ongoing crises. But despite the Post‘s doomsaying, the city almost certainly won’t close D.C. General.
Instead, the District may have found the last, best hope of keeping the Southeast hospital alive: turning it over to a “public benefit corporation” (PBC). According to top officials, Mayor Marion Barry plans to submit emergency legislation to the D.C. Council before year’s end to establish a “quasi-independent,” not-for-profit corporation to oversee D.C.’s public-health providers.
The PBC, say some hospital experts, may strike the delicate balance required to save the hospital, satisfying the demands of budget-cutters and the need to provide the poor with health care. According to fans of the scheme, the PBC would limit city spending by detaching the hospital from the city: The PBC would act like a private management company, freeing D.C. General from the District’s expensive bureaucracy, onerous personnel regulations, and meddling politicians. This would, in theory, allow the hospital to streamline operations and more equitably ration care, thus saving D.C. millions and wiping out its financial problems. Yet the PBC would keep the hospital open to serve the indigent and uninsured.
The PBC, which would be run by an 11-member board, would provide an encyclopedic reform of D.C.’s crumbling public-health system. Under the mayor’s proposed legislation, the city would leave the health care delivery business entirely. D.C. General and other public clinics would be taken over by the corporation, while the Commission of Public Health, which now supervises the hospital, would simply make—and enforce —policy. (The public-health commissioner would be an ex officio member of the PBC board.) Public-health funding would be channeled to the PBC from the current—albeit dicey—funding sources: congressional subsidy, D.C. taxpayers, Medicare and Medicaid, and paying patients. The PBC would be granted limited powers to issue bonds and notes and to create a capital-reserve fund.
“The idea is to get the D.C. government out of the health care business…to separate the primary operating components away from the day-to-day constraints of government,” says John Fairman, executive director of D.C. General and a member of the Mayor’s PBC steering committee, which was formed in March.
The PBC would take over early next year, Barry officials predict. After a series of public meetings this month, Barry will forward his bill to the council. Both the council and the control board have signaled their support for a PBC, and many observers believe Congress would also back the plan as a money-saver. If the legislation passes as easily as Barry officials anticipate, D.C. General Hospital and seven public-health clinics would move under the PBC umbrella in April 1996. In October, St. Elizabeths, community mental health clinics, nursing services, and prison health services would be taken over by the PBC.
D .C. General certainly needs a helping hand from someone. During the past year, the hospital has been buffeted by criticism from every quarter.
The District’s only public hospital is the first and last line of defense in a city facing a massive public-health crisis. The city’s death rate exceeds that of the national average in eight of the top 10 categories of killers—heart disease, cancer, homicide, cerebrovascular disease, pneumonia and influenza, chronic liver disease, perinatal conditions, and septicemia. Across the board, D.C. spends more per capita for health care and public hospital care than any other city nationwide. The bill for treating HIV-infected drug users alone will top $1 billion over the next 12 years, according to a February report from the mayor’s blue-ribbon panel on health care reform. One in four District residents doesn’t have any form of health insurance, and one in five receives Medicaid benefits. Most of them end up in D.C. General’s emergency room when they get sick.
D.C. General has combated the health crisis in ways critics question. Even as the hospital has plunged deeper and deeper into the red, it has continued to offer its indigent patients state-of-the-art teaching-hospital care for nothing—care that many middle-class Americans can’t afford. Its deficit has ballooned in recent years, climbing to $85 million by the end of 1994. But thanks to a recent downsizing, the hospital has plugged the hole: The deficit stabilized at about $84.2 million in fiscal year 1995. What’s more, the hospital claims Medicaid owes the facility about $50 million in back charges. Until the downsizing, D.C. General had more personnel per District resident than similar hospitals nationwide, and its employees were higher paid than those at any comparable institution.
Rushing to D.C. General’s defense, hospital officials contend that the facility has been scapegoated. Its annual budget is about $170 million, only about 4 percent of all the money spent on health care in D.C.
“Yes, D.C. General should be held to live within its resources, but it’s incorrect to say that D.C. General is even a sizable portion of the problem,” Fairman says. “We are the most critical part of the system. We are the safety net.”
But everyone knows the hospital can’t survive in its current incarnation. The budget axes are out for D.C. General on the Hill. During recent hearings, Rep. James Walsh (R-N.Y.), chairman of the D.C. Appropriations Subcommittee, issued the city an ultimatum: Solve D.C. General’s perennial problems by September 1996, or Congress will close it.
The hospital is doing its best to save itself. It has eliminated 160 beds and 60 doctors, 10 percent of its 2,572 employees. “We lost some critically needed people,” says Fairman. “We’re doing the best with what we have, though it’s a stretch.”
Nobody questions the need for such short-term staff cuts, but the cuts alone won’t save D.C. General. Many at the hospital are counting on the PBC as the bridge to long-term salvation of the hospital’s public- health care mission. In dozens of other cities, PBCs or similar public-hospital authorities have succeeded in balancing budgets. These independent bodies have slashed expensive programs and shed employees, while preserving the core hospital operations. According to Anne Camper, corporate counsel to the National Association of Public Hospitals, “in the great majority of cases, an authority or PBC-type structure has been a very effective legal and governing structure.”
Some charge that the PBC would simply repeat the errors of D.C. General, which many view as a jobs program for Barry’s cronies and supporters. Critics fear that Barry would appoint a PBC board beholden to him, all but gutting the board’s independence.
And even the supporters of a PBC admit that it would not be a panacea. “The PBC, unto itself, is not salvation,” says Dr. Arthur Hoyte, who chairs D.C. General’s advisory committee and co-chairs the PBC steering committee. To succeed, the PBC needs to be coupled with an overarching plan, something that the District has not prepared. But Hoyte, like many PBC supporters, sees in PBC the way to safeguard health care for D.C.’s poor. “It has the potential of improving it. I don’t think it can worsen it,” he says.
Nonetheless, many folks around town maintain that closing D.C. General is a better alternative. Howard University Hospital could pick up enough slack to protect the poor. “People on Capitol Hill screamed when Capitol Hill Hospital closed, but now no one misses it,” say Barry Passett, former president of the Greater Southeast Healthcare System and member of the PBC steering committee.
In the end, the debate over the PBC may be an irrelevant one. Changes in national policy may harm D.C. General so much that not even Dr. Ben Casey could rescue it. Even if Congress doesn’t order D.C. General to close, the hospital is in huge trouble on the Hill. Congress is calling for the city to slice another $250 million from the 1996 budget, which would certainly punish the hospital. And proposed GOP cuts in Medicare and Medicaid would make the grim situation worse. If the Republicans’ proposal becomes law, D.C. stands to lose about $4 billion in Medicare and $963 million in Medicaid over the next seven years, according to Clinton-administration estimates.
“My concern is that by the time they establish [the PBC], it may be too late,” says Passett.