A headline in the Metro section Nov. 19 misstated the timing of cutbacks in services at Greater Southeast Community Hospital. The changes were made over several weeks before the hospital's lender, National Century Financial Enterprises, filed for bankruptcy Monday. (Published 11/20/02)

Greater Southeast Community Hospital, the flagship of the District's recently privatized indigent health care system, diverted ambulances from its emergency room for most of the past weekend because a funding crisis reduced its nursing staff.

The hospital also has temporarily closed its 19-bed pediatrics unit and merged three general nursing units into one. As a result, its number of patients has dropped from about 220 earlier this year to 149 yesterday.

The emergency department reopened to ambulances yesterday morning and has reported no medical failures. But the collapse of National Century Financial Enterprises -- an Ohio lender that supplied virtually all of the hospital's daily cash -- has sparked concern among some employees.

Although none has missed a paycheck, many employees remember when Greater Southeast filed for bankruptcy in 1998 and then was sold to its current owners, Arizona-based Doctors Community Healthcare Corp. They are reliving the fear.

Hospital officials said they do not anticipate closure and are merely making reasonable adjustments while cash is scarce.

City administrators and executives at other D.C. hospitals said they were watching for any failure to treat patients at the facility on Southern Avenue SE and at the outpatient center it runs on the campus of the shuttered D.C. General Hospital. So far there has been none.

D.C. General, which Congress and the city ran for 195 years until it was undermined by management and financial crises, was closed in 2001 after the District signed a five-year contract with the D.C. Healthcare Alliance, a network of private providers led by Greater Southeast. After 18 months, many say privatization has not hurt services and in many cases has improved them.

But the failure of National Century, which filed for bankruptcy protection yesterday amid allegations of mismanagement and was visited over the weekend by FBI agents with a search warrant, threatens all that.

Greater Southeast Chief Executive Karen Dale said that the situation is only temporary but that employees are fearful.

"The lens through which everyone is looking is one of gloom and doom," Dale said. "People are in a panic. People want to take themselves off the [work] schedule. The other day, there was a rumor that the hospital was closing by noon, so I went unit to unit.

"I say, 'Look at me, look right at me -- I'm telling you this is not true.' They say, 'I know that's what you're saying, but we don't know who we can trust.' "

That fear has been fed by vendors who have gone unpaid for months. The most prominent are the four nursing agencies that assigned freelance nurses to Greater Southeast.

Such "traveling" nurses are paid higher wages than staff nurses and have been paid by the agencies, but the agencies have not collected from the hospital. Two of the agencies have pulled out. The other two continue to supply nurses but with limits on their hours. In addition, more than 20 medical specialists continue working while they wait for late payments.

"It's in the city's interest for Greater Southeast to be able to operate effectively, and everyone hopes they will be able to stabilize," said Robert Malson, president of the D.C. Hospital Association, which represents 17 area hospitals.

"We are comfortable that care is not being affected," said City Administrator John A. Koskinen. "We're in a time for the next few weeks where everyone is hoping Greater Southeast can put in place financing that replaces National Century."

Paul R. Tuft, chief executive of Doctors Community Healthcare Corp., said last week that he was negotiating with General Motors Acceptance Corp. to step in as a lender, but yesterday he said that the search has expanded.

"I am hopeful," he said. It remains unclear how long his firm, which also owns Hadley Memorial Hospital in Southeast Washington and three others in Chicago and Southern California, can last without a financial partner.

Dale said this all comes as Greater Southeast is scheduled to undergo a reinspection next week by the Joint Commission on Accreditation of Healthcare Organizations.

Last spring, the joint commission cited violations of 11 patient care and management standards at the hospital and the D.C. General outpatient facility. The agency reduced Greater Southeast's status from accreditation with full compliance to conditional accreditation.

The collapse of Greater Southeast Community Hospital's lender and cuts in services have made employees nervous.