Mayor Marion Barry yesterday turned down a request by D.C. General Hospital for an additional $4.2 million subsidy that the hospital's governing body had said was necessary to balance its 1983 and 1984 budgets.
"I find it truly incredible that the hospital continues to insist that additional funds are necessary," Barry said in a letter to Gilbert Hahn Jr., chairman of the D.C. General Hospital Commission.
Barry and other city officials sharply criticized the commission yesterday for what they said was its failure to adequately consider various cost-saving measures before asking for the additional money last Tuesday.
"I hope the mayor will change his mind," Hahn said. He said the city's only public hospital would actually fall about $10 million short by 1984. He said the hospital could make up that deficit by getting the $4.2 million and saving an additional $6 million through a package of legislative and administrative changes. The council is to consider some of those changes.
At a contentious hearing of the City Council's Committee on Human Services, committee Chairman Polly Shackleton (D-Ward 3) said it would be "unconscionable" to give D.C. General more than its current city subsidy of $39.1 million until the hospital tried to implement money-saving measures recommended in a recent study by the consulting firm of Peat, Marwick, and Mitchell.
Among its recommendations, the study suggested that D.C. General consider contracting out its dietary, housekeeping and maintenance services; eliminating some medical specialties that could be provided elsewhere; converting to fee-for-service payments rather than salaries for doctors, and improving its billing and accounting services.
Hahn, testifying before Shackleton's committee, said the hospital had already considered many of those recommendations and found them problematic. Contracting out, for instance, would result in a loss of at least 50 jobs among 300 to 400 workers and would "open us up to a strike," he said. Eliminating specialties and converting to fee-for-service are both strongly "resisted" by the medical staff for various reasons, he added.
The hospital commission initially projected a $31 million deficit last January, and had voted to close D.C. General on July 1 if its deficit were not eliminated. But the hospital revised that projection to $10 million after taking various measures to cut costs and receiving a commitment from the city for an additional $12 million for 1983 and 1984.
The hospital receives roughly 40 percent of its revenue from the city, with the rest coming from Medicaid or insurance payments and patient fees. The city originally budgeted $35.1 million for the hospital, but Barry agreed to recommend increases to $39.1 million this year and $43.1 million next year. The hospital was asking for a further increase.
Barry, while stressing his commitment to the hospital, said his staff review of D.C. General's budget found "absolutely no justification" for another subsidy. In fact, he added, they found "considerable evidence" that the increases already approved "may not be wholly necessary."