In the first major management change at the debt-ridden Greater Southeast Community Hospital since D.C. Mayor Anthony A. Williams bailed out the facility in May, hospital leaders are set to yield control on Monday to a team of turnaround specialists.
The goal of the bailout and management changes is to preserve some health services in an area where there is very little available.
If the contract is approved as expected Friday by the U.S. Bankruptcy Court, a temporary management team from Quorum Health Resources of Nashville will run the hospital for two months. That term can be extended through April 1 if the Greater Southeast board approves.
A Quorum subsidiary, Intensive Resource Group, will send a temporary chief executive and chief financial officer to guide the hospital, while Greater Southeast president George E. Gilbert and other key officials look over their shoulders. Intensive Resource Group specializes in turning hospitals around, including those coping with bankruptcy proceedings.
The help from Quorum, a $1.7 billion company that manages 230 nonprofit hospitals nationwide, will cost an estimated $203,000 a month. To Gilbert, it's a worthwhile expense.
"We're looking at these folks to come in and not only validate what we've done so far but to assist us with finding additional cost reductions and revenue enhancement to get us back to solvency," Gilbert said. "We're close to it now."
When Greater Southeast filed for Chapter 11 bankruptcy protection in May, attorneys said the system had debts of $66 million. The committee representing creditors in court has endorsed the hiring of Quorum, officials said.
Because it is the only major medical facility east of the Anacostia River, city leaders have been determined to keep Greater Southeast open. The bailout kept the 261 staffed beds open for less than the $8.5 million anticipated by Williams in May.
The hiring of consultants does not mean the hospital needs no other city help, however.
"I think that some more money may well be needed, but it's too soon to tell," said Greater Southeast outside counsel Robert A. Shelton. But he said there is reason for optimism because the bailout will keep the hospital going at least through September. At that point, Quorum will present an assessment of the hospital's future.
A new city commission studying health care reform will tackle the central question of how the city can reduce a vast oversupply of beds in unprofitable hospitals while improving preventive medical care for 80,000 uninsured residents.