- The Washington Times - Sunday, February 6, 2000

The heavily subsidized D.C. General Hospital is a hospital in serious trouble. Operated by the Public Benefit Corp. (PBC), which finances health care, it is a hospital whose primary mission is to provide health care to the poor and the underinsured. By all accounts its medical care is among the best in the area, yet rarely does the public hear of the mismanagement that jeopardizes the hospital.

D.C. General is beset with management woes. Its Medicaid reimbursement accounts are questionable, its maintenance and facility programs are aged, its payroll is too costly and its financial health is failing. In fact, recent numbers suggest the subsidies to the PBC and D.C. General are spun out of control not by the rising costs of health care itself, but by unchecked spending and rising labor costs.

For example, while the number of in-patient cases has been declining since 1995, the number of full-time employees has steadily risen for three straight years. Labor costs in 1996 were $71 million. Today payroll and benefits rose to $109 million. These interesting facts have led supporters to rightfully criticize operations. Some, including the mayor, have gone so far as to suggest ending the subsidy, essentially forcing the closure of the city's hospital.

Hospital officials concede labor costs are high. They say those numbers are high because they had to hire more personnel to improve bookkeeping and other operations. They did not, however, streamline administrative operations or make them more efficient and, to be sure, efficiency is the cornerstone of good management.

Efficiency, though, does not appear to be the primary concern of advocates for D.C. General Hospital. For them the underlying issue is a conspiracy to close the hospital. Last fall, in an obvious attempt to beat back such attempts and to reform health care programs for the needy, the hospital launched an ad campaign that implored TV viewers to "try to imagine a world without us." In December, the hospital's chief executive officer, John Fairman, sang more of the same in response to a memorandum that suggested D.C. General would be better off financially if it competed with private companies. The memo, part of an audit conducted on behalf of the control board, says such competition would generate savings between $22 million and $26 million each year.

To be frank, hiring more workers has merely compounded the hospital's money problems. More than $100 million in services at D.C. General in 1999 would have cost taxpayers nearly half that, only about $55 million, if those services had been bought from other providers. Indeed, that is precisely the heart of the matter and what has forced officials to cover $36 million in overspending and deficits two years in a row. And, while costs continue to rise, the longstanding problems billing errors, tardiness of filing Medicaid claims, overspending, antiquated administrative technology and a lack of internal controls to uncover fraud remain unsolved.

Moreover, 10 severely mentally ill children were moved out of a program run at D.C. General because, in the words of Deputy Mayor Carolyn Graham, conditions there "border on inhumane." At this juncture, as the legislative and executive branches move health care reform and efficient management to the top of their agendas, significant changes ought to apply to D.C. General Hospital as well.

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