In an effort to retain their hospital in downtown Washington, the owners of Doctors Hospital have proposed to the District of Columbia government that they transform the Metropolitan Hotel, which they also own, into a hospital that would replace the current facility scheduled to be torn down in 1980

The Doctors Hospital owners discussed the proposal at a March 18 meeting called by Albert P. Russo, acting director of the D.C. Human Resources Department. Russo urged that Doctors form an alliance with the Group Health Association, the 102,000 member prepaid health plan that also wants to build a hospital, and hat the two groups join forces at one hospital site.

He argued that this could keep both groups downtown where about 500 doctors have offices while not aggravating the problem of excessive hospital beds by building two hospitals. Too many empty hospital beds are a major factor in escalating health care costs.

Doctors Hospital first got a "certificate of need" - in effect, a building permit - in 1973, which expires June 11, unless Russo renews it. Russo has kept the door open to a merger by deferring a decision on giving Group Health permission to build although DHR's Health Planning Advisory Committee recommended that Group Health be denied a certificate of need because of the District's bed surplus.

Russo and other top DHR planning officials said DHR will explore the possibility of a merger between Group Health and Doctors or, as an alternative, encourage an alliance between Group Health and the 884-bed Washington Hospital Center.

Doctors Hospital has been at the center of an ongoing controversy between those who want to build a replacement downtown hospital convenient to hundreds of physicians who have offices nearby and those who worry that the Washington area already has too many unused hospital beds that are driving medical costs up.

But the hospital and the Metroplitan Hotel have also been mentioned in connection with several actions taken by Joseph P. Yeldell when he was director of the D.C. Department of Human Resources that could have benefited developer and parking lot magnate Dominic F. Antonelli Jr.

Yeldell recently disclosed that Antonelli was instrumental in helping Yeldell obtain two crucial loans in 1973 and 1976. During that same period - while Antonelli was a director and stockholder for Doctors Hospital's and Metropolitan Hotel's parent corporation - Yeldell took several actions designed to help get a replacement facility built for the hospital. For three years, Yeldell and the mayor also urged that the city buy Metropolitan Hotel to replace Glenn Dale Hospital for the chronically ill.

The U.S. Attorney's office here is investigating the Yeldell-Antonelli ties to determine if the decisions to help Doctors Hospital and to lease a Northeast Washington office building owned by Antonelli might have been made as a result of financial connections between the two men.

Louis Segadelli, Group Health executive director, said last week that the Metropolitan site could do for Group Health "but what's more important is that we have a real share in management." Group Health has been talking to both Doctor's and the Washington Hospital Center, he disclosed, and also has asked other hospitals for bids.

"We think an arrangement with Group Health can be worked out," said George Kell, vice president of Washington Medical Center, Inc. (WMC) Doctors' parent corporation. "But we have to have DHR approval of the site change."

The D.C. Medical Society voted last month to support the continued existence of Doctors Hospital. Dr. Nelson Trujillo, until recently chairman of the society's gastroenterology section and vice president of the Doctors Hospital board, said if the hospital "no longer exists, many more doctors will take care of their patients in suburban hospitals and move their offices," out of downtown.

Built in 1937 in the 1800 block of I Street NW, Doctors Hospital will be pulled down by mid-1980 to make way for the final section of International Square, a retail and office complex.

Now a 284-bed hospital, though it has room for 321 beds, it was only 68 per cent filled on the average in 1976, according to Kell. From 40 to 50 of these patients each day are Group Health's. In a shift from far more expensive George Washington University Hospital, Group Health began using Doctors Hospital last year until it could build.

In 1971, WMC, Doctors' parent, opened Metropolitan Hospital, a 530-bed, $7 million facility at 1143 New Hampshire Ave. NW. Kell said it was built to "high Medicare-Medicaid standards" to be a "superior skilled nursing or extended care facility."

WMC ran Metropolitan as an extended care center for just under a year, then for several months for simpler nursing care. But it lost money, Kell said, first "because Social Security never got enough money to finance high-quality extended care for Medicare patients," then "because the District couldn't reimburse us enough for quality Medicaid care."

Most health authorities have cited much the same reasons for the District's current severe shortage of extended and nursing care beds.

WMC turned Metropolitan into a 363-room hotel, and in 1975 leased it to TRT Inc., whose vice president, Richard Wolff, said it is "doing well." He added that he was disturbed to bear that WMC might want Metropolitan back, since TRT has a 13-year lease dated July, 1975. WMC has gone to court to try to terminate the lease.

Metropolitan always has remained in part a hospital. The Washington Psychiatric Institute operates a 42-bed psychiatric facility on the top floor.

For three years, beginning in 1974, Yeldell and Mayor Walter E. Washington sought permission from Congress to buy the Metropolitan Hotel to replace the deteriorated Glenn Dale hospital for the chronically ill. Congress refused and last week the mayor asked Congress for $17 million to renovate Glenn Dale.

This means, as Kell put it, the Metropolitan building "is available again."

WMC first had a District certificate of need to put up a new Doctors hospital on 20th Street NW. between I to K, but WMC could not attract financing there and sold the property.

It then proposed a site at 1111 19th Street NW. owned by a firm controlled by Antonelli. Antonelli, it was reported in Washington Post articles in early December, would have received both a half interest in the new hospital-medical office building and ownership of the hospital's present property.

A stock-holding member of WMC's board of directors, Antonelli met with Yeldell in June, 1976, to urge him to renew the Doctors' building certificate so it could be build on Antonelli property. Yeldell then renewed it - for a second time since 1975 - without consulting his Health Planning Advisory Committee, the usual process.

In the same period, Yeldell got two loans with Antonelli's help - one for $21,500 in 1973 for his travel agency and one in 1976 for $33,000 to help consolidated earlier loans.

Kell said last week that Antonelli late last year severed any financial connection with WMC and would not profit in any way by the new proposal. He said Antonelli is still a WMC director, but that he gave a foundation his "small amount of stock, about $5,000 worth, less than 1 per cent of our stock."

Remodeling Metropolitan as a 320-bed acute-care hospital would cost $18 million, compared with $32 million to build to new hospital on 19th Street, Kell maintained.