As Gray ponders options, United Medical Center gets $11 million cash infusion

March 29, 2013

United Medical Center, formerly the Greater Southeast Hospital, has been rescued from the brink with city money. But can it now thrive without direct taxpayer support? (Sarah L. Voisin — The Washington Post)

The District-owned United Medical Center has requested and received another $11 million in taxpayer funds to keep itself solvent.

Hospital spokeswoman Natalie Williams said the hospital board voted March 18 to request the funds from Mayor Vincent C. Gray — a day after I reported that the hospital’s cash situation was precarious and that another city bailout would be likely.

David Umansky, a spokesman for the Office of the Chief Financial Officer, said the $11 million has been paid out of the city’s contingency reserve, a special $229 million fund for “nonrecurring or unforeseen needs” that must be paid back within two fiscal years.

The cash infusion, adding to the roughly $100 million the city has spent on the hospital since 2007, should allow the hospital to pay its creditors, including Pepco and a host of medical suppliers. That should ease pressures as the turnaround artists from Huron Consulting take over the hospital’s management Friday. “A huge part of management’s time is figuring out which vendors to pay each week,” the hospital’s chief financial officer, Michael E. Davis, told me earlier this month.

Williams said in a statement that the hospital board is “pleased” the Gray administration approved the new funding. “This is the only request in 2013 submitted by the hospital and it will help in meeting the vision of UMC as an efficient, patient-focused, provider of high-quality health care the community deserves,” she said.

The direction of the hospital’s turnaround remains something of an enigma. D.C. Council members, including health committee chairman Yvette M. Alexander, successfully pressed Huron to agree that they would not explore downsizing the hospital — even though Huron’s contract with the city specifies that they are to implement a previous consultant’s recommendations that United Medical Center become a much smaller hospital.

Meanwhile, Gray (D) appears to be taking a whole new tack on saving the hospital. In the course of unveiling his budget proposal Thursday, he renewed longstanding talk of developing the valuable land on the UMC site — on Southern Avenue SE, not far from the Southern Avenue Metro stop — and using to the proceeds to support the hospital.

Notably, he also floated the possibility that the District might maintain ownership of the hospital building and simply contract out the hospital’s operations to a private company. For a guy who has been adamant about getting the city “out of the hospital business,” that’s an interesting twist on what constitutes not being in the hospital business — an acknowledgement, perhaps, that hopes of selling the financially precarious hospital outright to a private firm are dismal.

Mike DeBonis covers local politics and government for The Washington Post. He also writes a blog and a political analysis column that runs on Fridays.
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Mike DeBonis · March 29, 2013