- The Washington Times - Tuesday, November 25, 2003

Owners of Greater Southeast Community Hospital proposed in federal court yesterday that millions of dollars in outstanding loans be dismissed to help them retain control of the facility and continue providing health care to the community.

The request was made public in hearings on the owners’ bankruptcy reorganization statement, which showed executives borrowing millions from the hospital’s parent company, Doctors Community Healthcare Corp, but often not repaying the money.

The court records also showed that DCHC Chief Executive Officer Paul Tuft took home more than $6.8 million in salary and loans last year, the height of the hospital’s problems.

Other executives last year also earned large salaries and took out millions of dollars in company loans while the hospital struggled to adequately staff its emergency room, the records showed.

That debt would be forgiven under the reorganization plan, according to legal papers. The court could allow the executives to reorganize the debt, or the company could be forced to sell assets as early as next month.

The Arizona-based company bought the hospital three years ago from Greater Southeast Healthcare System Inc., but was forced to file for bankruptcy last November after the FBI raided the offices of its primary lender, Ohio-based National Century Financial Enterprises Inc.

The District helped the company provide health care to residents in the underserved Southeast community by giving it tens of millions of dollars. However, company executives said part of their financial problem was that the District still owes them about $13 million in Medicaid payments.

The hospital nearly had its license stripped by D.C. Department of Health inspectors during the summer because of mismanagement and staffing problems. The agency linked the deaths of at least six patients to failing conditions at the hospital.

But court-appointed management company Cambio Health Solutions helped improve the situation well enough for the hospital to keep its full accreditation.

The executives hope the bankruptcy court will let them reorganize their debt and retain possession of Greater Southeast and Hadley Memorial Hospital in the District.

Creditors say the hospital operates at deficits of roughly $2.5 million a month, so it could be hard for them to recoup their money unless the hospital closes.

Thomas Rearson, appointed by the court to oversee the auction of Greater Southeast’s assets, said yesterday that the hospital is likely to remain open, though Doctors Community Healthcare Corp. may no longer be the owner.

“We don’t know who the buyer is going to be,” he said during a break in the hearings. “But I think Greater Southeast is going to be fine.”

Concern that Southeast’s only remaining hospital would close also brought residents and community activists to court yesterday, including some who protested outside the courthouse at 333 Constitution Ave. NW.

“People would suffer,” said Concha Johnson, executive director of Senior Citizens Counseling and Delivery Service in Southeast. “This court should do everything in its power to see that Greater Southeast survives to save lives and contribute to the local economy.”

Leon Swain, a Ward 8 advisory neighborhood commissioner, said city officials accepted political donations, then ignored the hospital’s problems.

“The mayor and City Council have taken thousands of dollars in campaign contributions from these people and where are we?” Mr. Swain asked. “This city has forgotten about Greater Southeast Community Hospital.”

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