A panel studying how to reform the District's dysfunctional health system for the poor held its only scheduled public hearing yesterday, and the session quickly morphed into an uneasy debate over whether the city should consider pulling the plug on D.C. General Hospital.

The event was billed as a chance for citizens to share their views on health care in the District, where high-cost hospitals chase a shrinking number of patients while 81,000 uninsured residents have no reliable access to preventive medical care.

But few city residents addressed the Health Care Systems Development Commission members and Mayor Anthony A. Williams (D), D.C. financial control board Chairman Alice M. Rivlin, D.C. Council Chairman Linda W. Cropp (D) and council member Sandy Allen (D-Ward 8).

Instead the hearing was a forum for the many special-interest groups with a financial stake in the panel recommendations, which will help Williams formulate a health care proposal for upcoming 2001 budget deliberations.

The debates over extending Medicaid benefits to more residents and using tax credits to motivate employers to insure more workers is expected to be contentious.

But as usual, the fate of the public hospital at 300 Massachusetts Ave. SE overshadowed such issues as improving prescription drug benefits for the poor, meeting the forgotten medical needs of indigent men and offering more Spanish-speaking doctors and nurses to the Latino community.

On one side, hospital Chief Executive John Fairman, his aides, scores of doctors, union representatives, nurses, community activists and hospital board members turned out on behalf of the quasi-public agency that owns the hospital, the Public Benefit Corp. (PBC). They wore pins that read, "Save D.C. General Hospital."

On the other side was one man, Paul Offner, who continues to be a torment to them three months after completing a four-year stint as D.C. Medicaid director. During that time, he brought a runaway Medicaid program under budgetary control but earned many enemies in the hospital industry and on the D.C. Council in the process.

Now a research scholar at Georgetown University's school of policy studies, Offner described D.C. General as a woefully inefficient institution that soaked up $101 million in city funding in 1999 in exchange for only $55 million worth of medical care. That analysis, written with control board analyst Doneg McDonough, has been circulating among city policymakers for months.

"The services we are getting from the PBC we could get from the private sector for about half as much," he said. "You need a safety net, but you want to buy care in the most efficient way. . . . It's a very poor deal for the District."

Fairman rejected the analysis. "The $100 million is a bogus, manufactured number," Fairman said. He maintains that the city's actual 1999 support for the Public Benefit Corp. was $61 million and that the city received $89 million of services.

Cropp questioned Offner's numbers, and Allen said he has been wrong before.

The mayor praised Offner for sharing his "provocative" perspective with a hostile audience. "It takes courage and conviction to come up here and speak your mind," Williams said. "I commend you for that."

But the mayor was noncommittal and said the decision hinges on other things. "It's required that we at least consider the job impacts," he said. "We're government, not some private organization."

Offner replied that jobs would not be lost; they would simply shift from D.C. General to private facilities, which would have to hire many of the same workers.

D.C. General is the city's largest provider of care to the uninsured and Medicaid patients. Soon the District will be forced to decide whether to spend millions to replace or upgrade the deteriorating hospital or shift patients to private D.C. hospitals, which need the business.

Offner expressed confidence in his D.C. General analysis, but he challenged the panel to settle the financial argument so the city could move past predictable skirmishes.

"If these numbers are wrong, I'd be very happy to find out what the right numbers are," Offner said.