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Robert A. Malson, President
District of Columbia Hospital Association
Testimony to the Committee on Human Services on the
Public Benefits Corporation
September 18, 2000




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Chairperson Allen and members of the Committee on Human Services, I am Robert Malson, President of the District of Columbia Hospital Association (DCHA). As you know, DCHA represents all full service and most specialty hospitals in the District of Columbia, plus our affiliates, Malcolm Grow Medical Center at Andrews Air Force Base and the National Naval Medical Center in Bethesda, Md. The comments I make today represent the most recent views expressed by the hospitals' chief executive officers speaking collectively on behalf of the hospital industry in Washington, DC, and should not in any way be interpreted as representing any single individual hospital.

I appreciate the opportunity to express the Association's concerns about the potential disaster that surrounds the future of DC General Hospital and the Public Benefit Corporation. My comments will address how the proposed changes might impact the residents and hospitals of the District of Columbia and how some of the pitfalls might be avoided.


In the last month and a half, the DCHA Board has met with Council Chair Linda Cropp, PBC Board Chair Julius Hobson, Vice Chairman Nancy McCall and Department of Health Director Ivan C.A. Walks, MD, to receive regular reports on the fate of DC General and the ambulatory care clinics. I want to summarize some of the points from a letter DCHA sent to Mayor Williams soon after our September 8th Board meeting, which outlined our most immediate concerns.

  • The fate of the hospital and clinics is of utmost importance to the other hospitals in the District, which provide two-thirds of the care to the uninsured in the city. The commitment of private hospitals to the most vulnerable in this city has been questioned by some in recent weeks, but no one who knows the facts can doubt the reality of $200 million in unsponsored care, over $120 million of which is rendered annually by the private hospitals. Uninsured patients continue to be served by the private hospitals, in spite of their collective financial fragility, with an aggregate operating margin of negative three percent.
  • Private acute care hospitals are not able to absorb all of the patients who are now served by the PBC. We agree that some relatively small services, such as pediatrics and obstetrics, could be shifted to private hospitals without any loss in access or quality. But these hospitals are not able to take on such services as adult trauma care, emergency care, forensic medicine, HIV/AIDS, and acute psychiatric care. With issues like transportation, clogged operating rooms and intensive care units, and over-used emergency rooms, private hospitals believe that at a minimum, a small adult community hospital is a "must" at the current D.C. General Hospital location. Whether such a facility is operated by the PBC or some other entity is not the issue; it is a question of service to patients near to where they live and where they need care.

Given the hospitals' preference for a small community hospital and recognizing that the industry's belief is not shared by the government, I will now address specific concerns about the draft plan now being put forward that was shared with me by the Mayor's Office on Tuesday of last week.

Concern #l: No one has offered a concrete proposal as to how current patients would be steered to appropriate acute services and how such a facility would work if patients indeed arrived at the Community Access Hospital and needed inpatient care. The plan is silent on the actual process for transferring patients from the 23-hour facility to an inpatient facility. How will such transfers happen without jeopardizing the health of the patients? Without an explicit explanation of what will happen with every type of patient who might present there, the plan remains only a theoretical concept.

Concern #2: The focus must be on patients and patient care, and a plan must address every aspect of that focus. The private hospitals must be part of the planning process so they can provide the expertise that is currently missing from the conversation. For example, the private hospitals can also outline the costs of the various categories of patients now served at DC General. They cannot all be lumped into one per-patient average. The patients' needs are too varied. If private hospitals are to take on patients and be paid as has been suggested, we must have clear contracts that spell out each party's responsibilities.

Concern #3: The plan mentions that two hospitals have already committed to provide inpatient beds and "to accept all referrals needed for the uninsured." Yet, we have been assured that a Request For Proposal (RFP) will be issued to insure that all interested parties will have an opportunity to bid. We are also concerned that the Plan calls for the issuance of "Health Care Access" cards to uninsured patients who will be referred to contracted providers. Does this mean that the City is prepared to finance a health plan for the uninsured? If so, what will happen to those patients who present to non-contracted providers?

Concern #4: If private hospitals are to contract with the City, we must be confident that the District will honor its payment commitments for the benefit of the poor. We must be able to count on clear policies in the Medicaid State Plan and unambiguous statements by city officials who have the competence, credibility, and authority to commit the City. We cannot afford to have unlawful multimillion dollar Medicaid payment decisions made outside the scope of the law, as was done by the former Medicaid Director appointed by the former Mayor. Hospitals cannot be owed $30 million by the City for years on end for payments for thousands of Medicaid patients who have already received care. We must be considered full partners in the common mission to serve patients who have no health insurance and no one to turn to.

Concern # 5: The description of the Community Access Hospital does not speak to the problems of day-to-day management; how will that happen? What kind of leadership is envisioned to assure clinical quality and financial viability? When will such leadership be in place? It should be sooner rather than later.

Concern #6: A possible non-accreditation decision of DC General Hospital by the Joint Commission on Accreditation of Healthcare Organizations, and the loss of Medicaid and Medicare funding that would follow, hangs over all of us in the health care community. If such an action is taken by the Joint Commission, the hospital might be required to close for quality reasons sooner than anyone is prepared for, and the time-line for change at the PBC would be significantly compressed. Under such dire circumstances, patients would find themselves without care, without transportation, and without information. This situation is unacceptable. We need to be prepared for such a situation with the Mayor stating his personal commitment to make sure that no patient will be harmed if such a chaotic problem arises.

Concern #7: The timeline in the Plan calls for the transition of DC General Hospital to the Community Access Hospital on or around January 1, 2001. With the Inauguration of the new President of the United States set for later that month and the extraordinary numbers of people and security concerns surrounding that event, I suggest that the implementation be set for no earlier than February 1, 2001.


As I noted earlier, the potential loss of a trauma center at the DC General Hospital site is of great importance to the private hospitals. For years, our hospitals have advised District health officials that the health care system, with all of its faults, is an integrated entity, and what affects one part of the system has an impact on other parts. We strongly believe that health care services - especially emergency and trauma care - to citizens of Southeast DC must be rendered there, closer to their homes, not in Northwest. Hospitals have already experienced problems with ambulance rerouting, not only because of emergency room overcrowding, but also because of clogged operating rooms and intensive care units. If DC General Hospital closes or is no longer available for these patients, this problem will only get worse.

Without question, all other hospitals offering trauma services could be impacted severely if the trauma unit at DC General Hospital is closed- The Draft Plan discusses the intent to transfer patients from the Community Access Hospital to other hospitals within a day or so. We believe that the advice of the City's trauma surgeons should be sought on the desirability and risks involved with rapid transfers of seriously injured trauma patients. In addition, the ambulances of the Department of Fire and Emergency Medical Services are severely overburdened now. The Draft Plan describes the intent to revamp the EMS process, but nowhere does it discuss the number of additional vehicles that would be required, nor the reimbursement system that needs to be put into place for Level I trauma patients who will be diverted to other trauma centers. These are the most expensive patients and the costs of their care must be addressed.

We understand that obstetrics is one of the services that will be closed at DC General Hospital in the coming months. What is the City's Plan for the Community Access Hospital if a woman presents in active labor? It is absolutely imperative that the District officials have a concrete plan and a clear understanding of the requirements under Federal law.


Late last year, Mrs. Allen, you and your colleagues worked hard to educate other officials and the community about the need for keeping the full range of health care services accessible for District residents who live east of the Anacostia River. I must reiterate the long history of serving the uninsured by the District's private hospitals. But our hospitals are financially fragile. Without a viable plan to help us with the additional uninsured patient load, we may see other hospitals facing bankruptcy and closure. The current plan, as presented, contains no explanation or concrete financial plan to illustrate how the city will support the private hospitals as they accept more uninsured patients. We have been told that about 4,000 uninsured hospitalizations are involved. However, the DCHA Patient Data System shows nearly 7,000 uninsured patients admitted to DC General in 1999.

I want to be very clear here. If this plan is incomplete or is bungled in its execution, the negative impact will be felt first by the most vulnerable of our citizens and second, by all of us, including those who have health insurance.

The District's residents can ill afford to lose any major hospital, especially patients in Southeast DC, many of whom are Medicaid eligible, although many are not. Many of our hospitals are exploring how they might be able to provide coverage for the patients historically served by DC General Hospital. I have been assured that all our hospitals want to assist the City during this transition and they are anxiously awaiting the details of the plan before they can determine how much assistance they will be able to offer.


The fate of DC General Hospital and the PBC calls on this city, its Mayor, the Council, and the Federal Government to answer the fundamental question: What is the obligation of the District of Columbia to provide health care services to the poor?

Other cities and states have answered this question by providing a designated amount of tax revenue to support their public (or county) hospitals. While previous subsidies, bailouts, or other funding of the PBC may have been inappropriate in their amounts, the concept of the city making a commitment to the health care of the poor is the only appropriate moral response.

As we are called on to respond to the transition of the PBC and DC General Hospital, it is imperative that the Mayor state very clearly his position on how the city and the private hospitals sire the responsibility for this city's most vulnerable residents. DCHA and its member hospitals are committed to our missions to serve our communities and we will do everything possible to ensure that no PBC patient falls through the cracks. However, we cannot do this one, and we certainly cannot do this if we are not involved in the critical process to determine the future of the PBC. Our expertise must be part of the dialogue.

Thank you for holding this hearing and for this opportunity to present the Association's comments and concerns on the PBC crisis. I will be pleased to answer any questions the Committee may have.

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Unsponsored Care
Cost and Percentage of Individual Hospital Total Care
District of Columbia Hospital

  1996 1997 1998
  Cost of unsponsored care Percent of total care Cost of unsponsored care Percent of total care Cost of unsponsored care Percent of total care
Children's National Medical Center $32,943,000 16.68% $26,013,000 12.52% $31,331,000 14.23%
Columbia Hospital for Women Medical Center $2,107,000 3.75% $2,369,000 4.11% NA NA
District of Columbia General Hospital $74,264,000 58.77% $79,979,000 52.80% $80,316,000 55.30%
George Washington University Hospital $11,688,000 6.26% $7,297,000 5.60% $7,872,000 5.48%
Georgetown University Hospital $8,333,000 3.80% $10,073.000 4.65% $6,321,000 2.81%
Greater Southeast Community Hospital $8,087,000 7.39% $8,758,000 7,75% $12,883,000 9.20%
Hadley Memorial Hospital $1,220,000 6.02% $875,000 6.97% NA NA
Hospital for Sick Children $110,000 0.35% $2,255,000 6.66% NA NA
Howard University Hospital $35,504,000 19.87% $29,435,000 18.10% $27,461,000 16.09%
National Rehabilitation Hospital $2,158,000 4.18% $1,691,000 3.16% $1,481,000 2.97%
Providence Hospital $6,666,000 6.38% $8,315,000 7.34% $8,465,000 6.55%
Sibley Memorial Hospital $4,825,000 5.14% $4,795,000 4,87% $4,905,000 4.65%
Washington Hospital Center $34,814,000 8.56% $32,134,000 7.23% $30,423,000 5.69%
District Total $222,719,000 11.20% $213,989,000 10.16% $211,655,000 9.76%

Note: Calculation excludes MedLINK Hospital at Capitol Hill, and psychiatric and federal hospitals.
Note: Columbia Hospital for Women Medical Center, Hadley Memorial Hospital and Hospital for Sick Children did not report for 1998.
Source: 1998 DCHA Annual Hospital Survey.

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Unsponsored Care
Cost and Percentage of Individual Hospital Total Care
District of Columbia Hospital

  1999 1998
  Cost of unsponsored care Percent of total care Cost of unsponsored care Percent of total care
Children's National Medical Center $27,069,000 13.32% $31,331,000 14.23%
Columbia Hospital for Women Medical Center $1,642,000 2.80% NA NA
District of Columbia General Hospital NA NA $80,316,000 55.30%
George Washington University Hospital $7,527,000 5.08% $7,872,000 5.48%
Georgetown University Hospital $6,220,000 2.64% $6,321,000 2.81%
Greater Southeast Community Hospital $12,250,000 10.10% $12,883,000 9.20%
Hadley Memorial Hospital $1,069,000 2.99% NA NA
Howard University Hospital $37,191,000 15.84% $27,461,000 16.09%
National Rehabilitation Hospital $1,349,000 2.97% $1,481,000 2.97%
Providence Hospital $7,044,000 5.26% $8,456,000 6.55%
Sibley Memorial Hospital $4,197,000 3.75% $4,905,000 4.65%
Washington Hospital Center $32,346,000 5.63% $30,423,000 5.69%
District Total $213,989,000 10.16% $211,499,000 9.82%

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National Association of Public Hospitals and Health Systems
Net Revenues by Payer Source, 1998

Hospital Name Medicare Medicaid Commercial
Revenues % Revenues % Revenues %
Cambridge Public Health Commission, Boston MA $35,674,374 25% $29,626,723 20% $21,024,987 14%
Cook County BHS-Provident Hospital, Chicago, IL $3,629,785 5% $41,038,595 56% $62,959 0%
Cooper Green Hospital, Birmingham, AL $7,056,823 12% $14,278,200 24$ $627,577 1%
Grady Health System, Atlanta, GA $77,735,781 20% $180,997,804 46% $31,566,834 8%
Harris County Hospital District, Houston, TX $47,019,272 12% $155,736,416 40% $25,307,789 6%
LAC-Harbor/UCLA Medical Center, Ft. Lauderdale, FL $25,941,275 8% $213,763,647 63% $14,551,528 4$
NBHD-Broward General Medical Center, Ft. Lauderdale, FL $62,986,304 32% $32,157,961 16% $50,039,356 25%
Parkland Health & Hospital System, Dallas, TX $54, 280,127 12% $165,189,480 37% $36,733,948 9%
Regional Medical Center at Memphis, Memphis, TN $24,585,435 14% $29,350,937 17% $75,731,287 44$
Truman Medical Center, Kansas City, MO $38,821,071 25% $61,237,802 40% $7,381,260 5%


Hospital Name Self-Pay/Other State/Local Subsidies Total Net Patient Revenues
Revenues % Revenues %
Cambridge Public Health Commission, Boston MA $28,568 0% $58,980,954 41% $145,335,606
Cook County BHS-Provident Hospital, Chicago, IL $62,959 0% $23,016,401 32% $72,818,780
Cooper Green Hospital, Birmingham, AL $951,354 2% $36,119,381 61% $59,033,335
Grady Health System, Atlanta, GA $7,090,762 2% $96,568,288 25% $393,959,469
Harris County Hospital District, Houston, TX $10,798,844 3% $152,846,000 39% $391,708,321
LAC-Harbor/UCLA Medical Center, Ft. Lauderdale, FL $16,004,362 5% $67,481,713 20% $337,742,525
NBHD-Broward General Medical Center, Ft. Lauderdale, FL $14,436,940 7% $36,792,286 19% $196,412,847
Parkland Health & Hospital System, Dallas, TX $21,985,646 5% $166,241,255 37% $442,430,456
Regional Medical Center at Memphis, Memphis, TN $3,604,185 2% $39,816,407 23% $173,088,251
Truman Medical Center, Kansas City, MO $10,803,113 7% $36,290,536 23% $154,533,782

Source: National Association of Public Hospitals and Health System

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