D.C. Urged to Contribute $79 Million to Hospital's Sale or Face Closing

Closure of Greater Southeast Community Hospital could be imminent unless the D.C. government quickly commits $79 million toward its sale, the hospital's chief executive told D.C. Council members last night.

Hospital executive Cyril Allen led off a marathon session of the council's health committee that veered from Greater Southeast's increasingly dire situation to the plans of its would-be buyer to turn around the hospital's services, quality and reputation. It was the first testimony on the proposal since Specialty Hospitals of America signed a tentative purchase agreement last month, and the first public presentation by the New England-based company on its timeline and expectations for success.

"I implore you to bring the decision to a speedy conclusion," Allen told the committee.

Specialty's chief development officer, Frank Wilich Jr., promised that if the sale goes through, the company would immediately start to reestablish all clinical services cut in recent years. The hospital would restore hundreds of beds so it could provide various short- and long-term acute care and skilled nursing services.

"And I emphasize immediately," Wilich said.

He said a preliminary analysis indicated that as many as one in nine people entering the hospital's emergency room leaves without being evaluated by a medical professional.

"That's approximately 3,000 people [a year] deciding that no care is better than what's happening to them," Wilich said.

Between Allen and Wilich, the committee members heard that they have few choices when it comes to the hospital's future. The deal will be completed only if the city approves the loans and grants to Specialty, Wilich said.

"There's not a [private] financing source in the country that will do this deal," he said. Without the city's investment, "I think you should say goodbye to your hospital."

Allen did not endorse Specialty by name but told the committee that the city should go forward with an experienced hospital owner that has salvaged other failing institutions. Specialty officials say they have done just that in the nearly two years since the company arrived in Washington. It now runs two long-term care facilities here.

"I want someone who has done it, who is doing it," Allen said after detailing the tumultuous tenure of its present owner, Envision Hospital.

In the eight years since Envision took over, there have been seven chief executives, 10 operating officers, deep cuts in services and overwhelming desertions by Greater Southeast doctors and patients alike.

"There were many mistakes and promises not kept," Allen said of the Arizona-based company, which bought the hospital out of bankruptcy and declared bankruptcy midway through its tenure.

Recent weeks have brought new crises because Envision has failed to provide pledged funding. Yesterday morning, staff members confronted a major flood on the ground floor. Three days ago, the air-conditioning malfunctioned. Last week, it was failing ventilators.

Allen said Specialty project director Brian Wells, on site as part of the company's major review and planning, immediately offered him five new machines. "If any of you could understand what five new ventilators mean," Allen said. "And [he] did so without any assurances" of compensation.

Council member Carol Schwartz (R-At Large) acknowledged that she is concerned about the conditions of the deal and insisted the city hold Specialty to a strict accounting of its progress and promises. Unless negotiations are derailed, the council is scheduled to vote on the $79 million commitment as emergency action Tuesday.

"I don't think we have a choice," Schwartz said. "I'm telling you up front, I'm going to vote for this."

Specialty is close to signing Quorum Health Resources, a national company based in Tennessee, as a partner to run the 150 beds that would be allocated to short-term acute patients. Wilich said the same number would be targeted to patients needing skilled nursing and another 150 to adult and adolescent psychiatric patients.