- The Washington Times - Monday, March 13, 2006

Howard University Hospital officials yesterday said they have the financial stability to partner with the District to build a medical center, even though some D.C. Council members are expressing concerns about Howard’s operating losses, layoffs and pension liabilities.

“We have no expectation of a subsidy from the District,” said Derrick O. Hollings, chief financial officer for the hospital.

Mr. Hollings and other Howard officials testified yesterday at a council hearing on the use of tobacco-settlement funds to help build a new hospital on the site of D.C. General Hospital in Southeast.

The project, called the National Capital Medical Center, is expected to cost about $400 million.

Plans call for splitting construction costs between Howard and the District, with a new nonprofit entity running the facility. Howard has said it would not close its existing hospital on Georgia Avenue in Northwest.

Several council members yesterday questioned the existing hospital’s finances. The hospital laid off 125 employees last year, and lost more than $17 million in fiscal 2005, according to Medicaid regulatory filings.

Council member David A. Catania, at-large independent and chairman of the D.C. Council’s Committee on Health, questioned how Howard plans to handle roughly $40 million in pension liabilities.

He said he fears that Howard could spin off its unfunded pension liabilities and other debt to the National Capital Medical Center.

Mr. Catania said “enormous pension issues” are hurting Howard’s finances.

“I’m looking at this deal, and I don’t see the numbers working,” he said.

City Administrator Robert C. Bobb said the deal is financially sound, but that Howard will have to deal with any unfunded pension liabilities.

“The District will not be responsible for any ongoing operating costs,” he said.

Dr. Hassan Minor, Howard University’s senior vice president, said the layoff of 125 employees last year was “an extremely difficult decision.”

“We were fully aware of the fact that if we had a layoff during the process, people would take this the wrong way,” Dr. Minor said. “There was a need to realign ourselves … and we did it. That was the proper thing to do.”

Council member Vincent C. Gray, a Ward 7 Democrat who is running for council chairman, said the project has the support of many community groups because of a lack of health services east of the Anacostia River.

“There is a very, very substantial amount of support,” he said.

Council member Kathy Patterson, a Ward 3 Democrat who also is running for council chairman, asked why the District is putting a hospital in Ward 6 when the need for health services is greatest in Wards 7 and 8.

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