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James A. Buford, Acting Director, Department of Health
Statement on the DC Health Care Alliance and the Status of the Contract with Greater Southeast Community Hospital
November 21, 2002




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District of Columbia Committee on Human Services
Department of Health
Health Care Safety Net Administration
Committee on Human Services

Statement of James A. Buford
Acting Director

November 21, 2002

Thank you Chairperson Allen and members of the Committee and good morning. I am James A. Buford, Acting Director of the Department of Health. Joining me this morning is Brenda Thompson, Deputy Director of the Health Care Safety Net Administration; Phillip Husband, Special Counsel; Imeh Jones, Chief Financial Officer, and Denise Pope, Administrator, Health Regulation Administration.

We appreciate the opportunity to appear before you to brief you. on the Healthcare Alliance contract with the Greater Southeast Community Hospital.

As you know the Healthcare Alliance is a public-private partnership between Greater Southeast Community Hospital Corporation, Unity Health Care, Children's National Medical Center, George Washington Hospital and the Department of Health to provide health care coverage to eligible uninsured residents of the District.

For the past eighteen months the Health Care Alliance has provided services to more than 37,000 individuals. Many of these individuals are now receiving regular preventive health care, dental care, access to prescription drugs, and early hospitalization. As members of the Alliance they have access to a comprehensive array of primary care services, case management, and health education programs. Disease management programs have been developed to better serve high-risk individuals with chronic diseases.

The creation of the Healthcare Alliance gave rise to new concepts and methodologies for health care delivery that now forms the core service component for uninsured District residents. A snapshot of improved outcomes are:

  • a service delivery structure that utilizes a patient-centered care model as a guiding principle for care;
  • a program that provides services only to District residents;
  • an expanded array of service delivery sites that include six hospitals, 28 neighborhood clinics and 780 primary care providers and specialists;
  • the network of providers coordinates services with each member's medical home (primary care provider) for continued focus on primary care and disease prevention; and
  • a system for data collection and reporting that provides information regarding the cost, disease status, treatment and utilization of the services provided through the Alliance.

The initial year of the Alliance closed in May of 2002 having succeeded in two very significant areas: 

  1. The number of individuals enrolled in the Alliance exceeded 25,000 and the number of individuals served exceeded 35,000 - resulting in considerable access to health care services for the uninsured.
  2. The number of providers increased from three to six hospitals, the number of primary care providers expanded to include the "non-profit" neighborhood clinics, and the number of physicians and specialist grew to approximately 800 participating practitioners. Again, the pathways to health care services to the uninsured were expanded.

Madam Chair the financial statement for the first program year is incomplete. The reconciliation process has been delayed because of a significant number of claims being incorporated at the end of the process delaying closure for another ten days (December 2).

Program Year Two

The second program year is now into its fifth month. The enrollment is steady and utilization of all services is increasing. At the rate at which we are currently spending - remaining in budget by year-end will be a major challenge. Our plan is to take mid-year measures to address budget pressures that will include the following:

  • Clarify presumptive eligibility (eliminate) - reduce the number of individuals served who are later determined ineligible - as well as the number of individuals who are served only one time.
  • Retroactive payment of claims - to reduce the number of claims that are paid in advance and subsequently denied.
  • Pre-authorization of hospital admissions - to reduce the number of inappropriate hospital admissions.
  • Consider reducing the payment of the access maintenance cost at the DC General campus.
We also plan to cover the $4.7 million reduction that the Health Care Safety Net Administration had to take in its 2003 budget. 

We will provide you with a copy of our year one program close out statement as soon as we can make it available. 

Additionally, we will inform you of the measures that are implemented to address the 2003 budget pressures and what we project their value to be.

Recent Events

Another challenge - I am sure you have read the extensive media coverage of the financial situation of National Century Financial Enterprise Inc. - Doctors Community Healthcare Corporation, and its subsidiaries in the District--the Greater Southeast Community Hospital and Hadley Memorial Hospital. As a result of the bankruptcy filed by National Century a few days ago - Doctors' Community Healthcare Corporation filed bankruptcy yesterday, November 20, 2002. These events have national implications-but they also have a more immediate local impact on the Greater Southeast Hospital and Hadley Memorial Hospital. A ripple effect on the District's entire health care system is unfolding as we meet today. 

This situation presents challenges and opportunities for the Department of Health and the District leadership-with regard to our attempts to ensure health care coverage for the underserved community of the District, and our ability to effectively undertake the mandate of assuring health services for District residents.

The recent information regarding the financial difficulties at National Century and Doctors Community Healthcare Corp. has caused us to have concerns about the financial viability of Greater Southeast Hospital and thus the need to increase our monitoring of the hospital with regard to quality of care issues. Additionally, we are concerned about the hospital's ability to carry out its responsibilities as the prime contractor for the Alliance Partnership.

Daily Monitoring

With regard to our monitoring, we have assigned a monitoring team to assess and monitor the hospital and DC General campus services on a daily basis. The actions taken to date include:
  1. Monitors assigned to Greater Southeast Hospital to ensure that the quality of patient care meets appropriate standards.
  2. Daily meetings and conference calls have been initiated with staff members to review information collected at these locations over a 24-hour period.
  3. Discussions held with the leadership of the hospital (GSCH) to acquire real time information.
  4. Detailed financial information has been requested to more fully assess the current and future financial condition of the hospital.
  5. A review of contractual and other legal issues to inform decision-making.
  6. A review of options for ensuring continuity of patient care in the event Greater Southeast is unsuccessful in acquiring the resources to sustain operations and service delivery.

Contingency Plan

As we go forward in this "bankruptcy environment," we are hopeful that the Greater Southeast Hospital is successful in its efforts to secure funding that will support its operating cost for the period of its reorganization.

And in this environment it is the primary responsibility of the Health Care Safety Net Administration is to ensure the provision of quality health care services to the eligible uninsured residents of the District through the Alliance. Additionally, the department also has a responsibility to ensure that residents in the southeast quadrant of the District have access to quality health care. 

After careful consideration of the facts, we have concluded that we must put in place a contingency plan that will allow us to continue to meet the health care needs of our uninsured residents without interruption if the efforts of GSCHC are unsuccessful. Our contingency plan is to recommend the termination of GSCHC as the prime contractor for the Health Care Alliance Initiative. 

The termination of the contract does not mean the loss of a provider, but will ensure the ongoing viability of the Alliance program for the uninsured. If it is possible, we will continue to have GSCHC participate as a provider of inpatient care in the Alliance network. 

We will work with the other hospital partners in the Alliance to expand their participation in this effort. And the Department of Health - for the balance of this current program year only will assume some of the responsibility of the prime contractor. 


Madam Chairman and Committee members, I will end by reiterating that our energies should will be directed at addressing the issues at hand-and on giving considerable thought to the actions we must implement, recognizing the implications of whatever plans we develop have for maximizing uninterrupted and continued access to the level and scope of care which our residents depend upon -- and particularly those individuals most at risk -- our uninsured and medically underserved population. 

Thank you for the opportunity to testify before you today. We would be please to answer your questions.

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