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D.C. hospital contract set for vote

Council still not without questions on spending $12.7M

- The Washington Times - Sunday, February 17, 2013

A $12.7 million contract to overhaul the city's publicly owned hospital is poised to pass the D.C. Council on Tuesday, after a four-hour hearing last week during which several council members appeared to have made up their minds and others expressed uncertainty as to why the contract is necessary in the first place.

The deal took on renewed significance in recent weeks when companies that didn't get the contract pointed out irregularities in the award process. But the protests also revived a wider debate into whether the city should spend millions of additional dollars on a hospital that has seen progress in recent years after a decade of troubles with private ownership groups requiring vast infusions of taxpayer money.

During the hearing Wednesday, called by council Chairman Phil Mendelson, a bloc of support for the contract seemed to emerge from council members Marion Barry, Yvette M. Alexander and Anita Bonds.

At issue is the award to Chicago-based Huron Healthcare to "turn around" United Medical Center, the only hospital east of the Anacostia River. The effort was recommended in a 2011 consultant's report that suggested downsizing the full-service, 300-plus bed hospital into an ambulatory-care center -- which could make the facility more attractive to a potential buyer.

But the contract to perform the work was challenged by competitors who, among other irregularities, claimed Huron was allowed to change subcontractors midway through the process after failing to include a certified local firm in its original proposal, as is required by D.C. law.

Mr. Barry, Ward 8 Democrat in whose district the hospital sits, said he based his decision to support the Huron contract on input from the chairman of the hospital's board, Bishop Charles Matthew Hudson Jr.

Mr. Hudson, an appointee of Mayor Vincent C. Gray, was depicted in a 2011 City Paper article as micromanaging the hospital beyond his responsibilities and creating a dysfunctional environment. Mr. Hudson countered in the report that he was providing leadership after years of mismanagement.

Ms. Alexander, Ward 7 Democrat, said she was "baffled" as to why the council was having a hearing at all and indicated she likely would vote to approve the award to Huron.

Ms. Bonds, at-large Democrat, defended the award but noted that minority business and procurement procedures need to be streamlined.

Contract vs. medical care

Other council members who attended the hearing seemed less committed, especially as the hearing nominally called to address issues of fairness in the contract process blurred into discussions about the fate of the city-owned hospital.

Council member David Grosso, at-large independent, began the meeting by saying he was "extremely confused" by what was happening and that he was "not inclined to get involved."

Council member David A. Catania, who is intimately familiar with the hospital after serving as chairman of the council's Committee on Health from 2005 until this year, said the council should not be overseeing contracts at all. In this case, the at-large independent doesn't support the turnaround effort because he believes strongly in the recent progress the hospital has made in spite of years of financial mismanagement.

The remainder of the council members steered clear of the hearing and have declined to comment on the contract process or the hospital -- which, Mr. Catania said, is the problem with the upcoming vote and the oversight role the council is playing.

Noting that many of his colleagues have either never visited the hospital or have not been there in many years, Mr. Catania reiterated his long-held belief that the real problem is that outgoing D.C. Chief Financial Officer Natwar M. Gandhi disrupted the hospital's payment collections by firing a reputable accounting firm and replacing it with an out-of-town company that botched the job.

Dealing with a 'sideshow'

"Before Vincent Gray became mayor, we had been successful keeping Gandhi away from the hospital," Mr. Catania said. "We wanted to give the hospital a chance to grow and increase demand, then hopefully partner with a large national chain."

Mr. Gandhi has long advocated selling the medical center, warning that the financial demands of running a hospital could eventually threaten the city's bond rating.

Mr. Catania said the contract controversy that will be voted on Tuesday is a "sideshow, a distraction" from the real issues facing the hospital. He recited an array of statistics that suggest growth has been substantial -- doubling revenues and tripling the number of patients seen in the emergency room.

"Maybe Huron can come up with some reasonable numbers," he offered, referring to the task of collecting what the hospital is owed from Medicaid and other payers. "Though I don't trust anyone with regard to this."

Samuel Jordan, chairman of the United Medical Center Foundation, the hospital's nonprofit fundraising arm, agreed that issues of fairness in the contracting process are secondary to questions of "public morality" that could arise if Huron is brought in to downsize the hospital.

"Particularly when no study has been conducted to ascertain the health care needs of 200,000 residents that make up the communities served by the hospital east of the river," he said Friday.

$12.7 million for what?

The November 2011 consultant's report that called for the turnaround contract requires a transition of UMC from a full-service, acute-care hospital to an ambulatory-care facility of 60 beds or fewer, Mr. Jordan said, noting that the report did not include a community health care needs assessment.

"Who on this Committee of the Whole will be responsible for the likelihood of death and aggravation of acute illnesses when the hospital is downsized, sold or closed and travel times to hospitals west of the Anacostia become critical to patient survival?" he asked Wednesday at the council hearing.

Then, if the end-game is to sell the hospital, he said, "why should we spend $12.7 million on consultant fees to downsize and sell [it] low when we could invest $12.7 million to improve the hospital and sell it high?

"None of the funds, by the way, will be applied to patient services, physical plant improvements or new technologies," he said of the contract.

But with half of the council present at Wednesday's hearing, and the majority of those signaling their intent to approve the Huron contract, the concerns that brought about the meeting are as likely to be addressed, at this point, as the reasons for seeking the contract in the first place.

"This contract promotes questionable research, self-dealing and waste of public funds," Mr. Jordan said, while at the same time acknowledging his concerns are a moot point.

"It should be withdrawn and thoroughly reconsidered as to its objectives, its costs, its lack of public morality, its lack of transparency and meaningful engagement of representatives of affected communities."

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