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DC Financial Responsibility and Management Assistance Authority
Actions regarding the Public Benefit Corporation and DC General Hospital
April 27, 2001




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Press release Statement of Alice Rivlin
Resolution declaring emergency Resolution and order concerning the Public Benefit Corporation
DCFRMAA-1, Health Care Privitization Emergency Act DCFRMAA-2, Health Care Privitization Temporary Act
DCFRMAA-3, Health Care Privitization Amendment Act Resolution and Order Concerning the Transition to New Health Care System
Restructuring Plan, December 2000 Resolution, Recommendations and Orders Concerning the Public Benefit Corporation, December 2000
Chief Financial Officer’s memorandum, November 14, 2000 DC Act 13-454, DC Health and Hospitals Public Benefit Corporation Emergency Amendment Act of 2000


District of Columbia Financial Responsibility And Management Assistance Authority Washington, D.C.

April 27, 2001


Washington, D.C. -- The District of Columbia Financial Responsibility and Management Assistance Authority ("Authority") today announced that it would hold a public meeting on Monday, April 30, 2001. The purpose of this meeting is to consider actions regarding the provision of health care services for indigent residents of the District of Columbia, the future role of the Public Benefit Corporation in the provision of those services and the recent supplemental appropriations bill enacted by the District of Columbia City Council.

The meeting, which is open to the public, will be held at 2:00 PM Monday in Conference Room 1030 South of the One Judiciary Square Building, 441 4th Street, NW, Washington, D.C.

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District of Columbia Financial Responsibility And Management Assistance Authority
Washington, D.C.

April 30, 2001
CONTACT: Glenn Dixon

Statement of the Chairman
Alice M. Rivlin

Good Afternoon. The Financial Authority meets today to consider the provision of health care services for low-income and uninsured residents of the District of Columbia, the future of the Public Benefit Corporation (PBC) in the management and provision of those services, and the recent actions by the D.C. City Council to reject the health care privatization proposal negotiated by the D.C. Financial Responsibility and Management Assistance Authority on behalf of District Mayor Anthony A. Williams.

We are acting to improve access to healthcare services for the District's citizens in need and to enhance service to the population currently using D.C. General Hospital and the PBC clinics. At this critical juncture, we reaffirm the Authority's deep commitment to improving health care services for the District's most vulnerable residents. Nothing is more important.

The Mayor, the Council and the Authority share the goal of improving health care services for the population using DC General and its clinics. To that end we have worked together over many months in an attempt to craft a common solution to the City's health care crisis. Unfortunately, this extensive work has not yielded the cooperative solution we all wanted.

Last Friday, the Council voted against the proposed contract, negotiated by the Authority and forwarded to the Council by the Mayor. Under the contract, public funds would be used to purchase health care services and management from a group of private providers led by Greater Southeast Community Hospital (GSCH). Representatives from the Mayor's office, the Council and the Authority participated in the process of drafting a request for proposals and in the technical and health care evaluation panels that chose the proposal advanced by GSECH and its partners. There were no viable competing proposals. The contract has now been rejected by the Council. The Council also overrode the Mayor's veto of their $21.5 million supplemental appropriation that seeks to keep D.C. General fully operational through the end of September. The comprehensive recommendations we made to the Council in our December 4, 2000, Resolution, Recommendations and Order pursuant to Section 207 of our governing statutes have all been rejected by the Council. Hope for a cooperative solution has now vanished.

The Authority strongly supports Mayor Williams's plan to contract with GSECH and its partners, Unity Health Care, Chartered Health Care, George Washington University Hospital and Children's National Medical Center-collectively called the "D.C. Healthcare Alliance." The Authority and its staff worked diligently over many weeks to hammer out the details of the contract and to make sure that the providers had the capacity and ability to provide the services they were promising and that the partners had a clear understanding of what they were to do, how they would work together, and how their performance would be monitored by the District's Department of Health. We are satisfied that the providers have a solid plan and the capacity to implement it effectively.

The plan is controversial because it involves closing the inpatient facility at D.C. General Hospital and purchasing expanded patient care services from private providers monitored by the D.C. Department of Health. Only the inpatient services at the D.C. General site will close. The rest of D.C. General Hospital will remain open, and outpatient and 24-hour emergency services will continue. Approximately ninety percent of the current patient visits to D.C. General do not involve inpatient treatment, so the vast preponderance of patients now seeking care at D.C. General will still have access to care in the same location.

A major strength of the D.C. Healthcare Alliance plan is that it will give the population now using D.C. and the PBC clinics access to a wider network of providers and substantially more care. The contract provides for the delivery of more than 30 percent more health services than the Public Benefit Corporation now provides. This care will be delivered by a network that includes additional hospitals, more trauma centers, a major increase in primary care clinics located throughout the city and access to many more private primary care practitioners and private specialists than under the present system. The D.C. Healthcare Alliance offers comprehensive, integrated management and a modern management information system, in sharp contrast to the haphazard, uncoordinated management and administrative system of the present PBC.

Washington, D.C is currently plagued by extraordinary urban health concerns:

  • Infant mortality is the highest in the U.S

  • The AIDS death rate is the highest in the U.S

  • The average life expectancy of African American men is 10 years less than the population elsewhere in the country - and again the worst in the country.

  • Tuberculosis, diabetes and other diseases are rampant - over 24,000 people in D.C. have untreated diabetes.

  • Over 10 percent of the population, about 65,000 residents, have no health insurance, private or governmental.

These statistics are symptoms of a health crisis in the City. This crisis will not be solved by provision of health care services alone, but it can be alleviated if the lowincome uninsured population is brought into a network of providers that emphasize primary care, prevention, and management of disease. Currently, far too many patients use the emergency room at D.C. General as their primary care facility. Emergency rooms are not designed for the provision of primary care services. Health concerns, as a result, are often not treated early in their development when they could be managed and more serious problems prevented. Widely available primary care, as envisioned under the D.C. Healthcare Alliance, would make evaluative care available earlier in the cycle of disease and help remedy the delays in detecting and responding to treatable illnesses.

In addition, services under the D.C. Healthcare Alliance will be much less costly. The restructured system projects total costs of approximately $93 million for all services. The PBC cost nearly $122 million for fiscal year 2000 alone - a difference of almost $30 million in projected costs. The Authority is convinced that this plan will substantially improve health care for uninsured District residents and ultimately make this population healthier.

With all of this in mind, the Authority now feels compelled to consider taking action to resolve these concerns. Despite passage by the Council of recent resolutions to reject the D.C. Healthcare Alliance proposal and to override the Mayor's veto of the Council's $21.5 million supplemental appropriation, the District's health care concerns cannot be ignored. The status quo cannot continue and no viable alternative has been presented. Whatever mistakes were committed in the past, we are convinced that at this moment it would be impossible to build a comprehensive, high quality health care initiative with the existing deteriorating, mismanaged and high cost D.C General Hospital and the deficit ridden PBC as its anchor.

If the Authority exercises its prerogative to act under Section 207 of its enabling legislation to execute the proposed contract, the question might be asked, "Is the failure of the Mayor and the Council to agree on this important issue evidence that the District is not ready to move toward home rule?" We think not.

The question of healthcare services for the District is a deeply frustrating and persistent problem, one that political leaders in the city have been fiercely reluctant to address. There appears to be no way to resolve the long-festering problems associated with reforming the city's provision of healthcare without major changes. This issue can be described as the proverbial "third rail" of political life in this city. Mayor Williams, although he has been unable to forge an agreement on healthcare with the Council, is to be commended for having the courage to accept the challenge. The healthcare issue for the District is truly unique in this regard, and once resolved, may allow the Mayor and the Council to return to a more traditional executive to legislative political relationship. We believe this outcome is likely, and we look forward to more civil and gracious political discourse in the future.

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To declare the existence of an emergency with respect to the need to privatize comprehensive community-based health care for uninsured residents of the District and to abolish the Public Benefit Corporation.

RESOLVED, BY THE DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY ("AUTHORITY"), That this resolution is enacted pursuant to Section 207 of Public Law 104-8 and may be cited as the "Health Care Privatization Emergency Amendment Act of 2001 Emergency Declaration Resolution of 2001 ".

Sec. 2. (a) There exists an immediate crisis regarding the provision and delivery of comprehensive health care and medical treatment for uninsured residents of the District of Columbia.

(b) The District of Columbia Health and Hospitals Public Benefit Corporation ("Public Benefit Corporation") has required subsidies from the General Fund since its creation pursuant to the Health and Hospitals Public Benefit Corporation Act of 1996, effective April 9, 1997 (D.C. Law 11-212; D.C. Code § 32-261.1 et seq.). The FY 2001 $45.3 million appropriated subsidy from the General Fund to the Public Benefit Corporation has already been exhausted.

(c) The District of Columbia Appropriations Act, 2001 Public Law 106-522, ("Appropriations Act"), approved November 22, 2000, prohibits the District from using any additional appropriated funds for the Public Benefit Corporation, except as part of the implementation of a health care restructuring plan that is approved by the Mayor, the Authority, the Council, and the Board of Directors of the Public Benefit Corporation. The Appropriations Act authorizes the District to transfer from other non-federal funds up to $90 million for the purpose of carrying out such an approved plan to restructure health care delivery in the District.

(d) On December 4, 2000, the Authority issued a Resolution, Recommendations and Orders under section 207 of the District of Columbia Financial Responsibility and Management Assistance Act of 1995, approved April 17, 1995 (109 Stat. 116; D.C. Code § 47-392.7), for repeal of Titles I and II of the Health and Hospitals Public Benefit Corporation Act of 1996 and enactment of legislation and regulations and approval of reprogrammings necessary to implement an alternative publicly-financed health care delivery system. The Council of the District of Columbia has failed to adopt the Authority's December 4, 2000 Recommendations.

(e) On December 15, 2000, in accordance with the requirements of the Appropriations Act, the Mayor submitted a restructuring plan to Congress that was approved by the Mayor, the Council, the Authority, and the Board of Directors of the Public Benefit Corporation.

(f) Because the Public Benefit Corporation's appropriated FY 2001 subsidy of $45.3 million has already been exhausted, health care restructuring is essential to permit access to the $90 million of funding authorized in the Appropriations Act and to maintain continuity of care for the District's uninsured population.

(g) Enactment of the Health Care Privatization Emergency Amendment Act of 2001 will assure access to the $90 million of funding to implement a restructured health care delivery system as recommended by the Authority in its Resolution, Recommendations and Orders of December 4, 2000, and in accordance with the approved restructuring plan of December 15, 2000.

Sec. 3. The Authority finds that the circumstances enumerated in section 2 constitute emergency circumstances making it necessary that the Health Care Privatization Emergency Amendment Act of 2001 be adopted immediately.

Sec. 4. This resolution shall take effect immediately.

Alice M. Rivlin

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