Top District officials agreed yesterday to restructure the city's recently privatized indigent health care system now that its prime contractor has gotten bankruptcy court protection.
In a breakfast meeting, city officials said, Mayor Anthony A. Williams (D) and D.C. Council members also reached consensus on the need to keep the contractor's main local facility, Greater Southeast Community Hospital, open because it is the only acute-care general hospital east of the Anacostia River. It also serves neighboring Prince George's County.
But officials continued to hope that the hospital's parent company succeeds in finding financing that can keep the hospital operating. Failing that, they said, they will wait to see what steps they need to take.
Greater Southeast's inpatient census has continued to drop since the bankruptcy filing Wednesday, city officials said. Yesterday, 125 patients were in the hospital at midday, down from an average of 220 earlier this year.
Arizona-based Doctors Community HealthCare Corp., which owns Greater Southeast and nearby Hadley Memorial Hospital, a long-term care facility, has agreed to step aside as general contractor of the network. The network, known as the D.C. Healthcare Alliance, has about 28,000 enrollees and costs the city about $70 million a year.
City health officials are deliberating which of three alliance subcontractors to promote to general contractor, which oversees the work of numerous health care providers and directly operates a multispecialty outpatient clinic and urgent-care center.
The three firms up for consideration are D.C. Chartered Health Plan, a private, for-profit health maintenance organization for D.C. Medicaid recipients that processes alliance claims; Howard University Hospital; and Unity Health Care, a nonprofit chain of clinics that offers basic outpatient services.
Some city officials, including D.C. Council member Kevin P. Chavous (D-Ward 7) expressed reservations about having a hospital as the general contractor because of its inherent competition with other hospitals in the network.
Chavous, who said he discussed the crisis with the mayor over the weekend, said the D.C. Health Department should fill long-standing vacancies in the office that monitors the alliance and market the program more aggressively.
"There are aspects of the alliance concept that make sense, and I've come to acknowledge that," said Chavous, who vehemently opposed the privatization last year. "But it's very tenuous to place your reliance on a private for-profit entity to take care of the public health needs of your low-income population."
The bankruptcy came because Doctors Community's lender, National Century Financial Enterprises, cut its daily support in recent months and eventually halted it. Last week, the Ohio firm filed for bankruptcy protection, and Doctors Community followed two days later.
District officials said the alliance is healthy and safely separated from the financial woes at Greater Southeast, but Washington Hospital Center has said the alliance threatens the financial health of all city hospitals.
Last week, the hospital center announced that it would stop treating nonemergency alliance patients on Dec. 1 in protest of the alliance's unwillingness to pay $4.5 million the hospital claims it is owed.
Yesterday, John P. McDaniel, chief executive of MedStar Health, the hospital center's parent corporation, presented a plan to Washington Post editors that would get more reimbursement for the hospital center from a reconstituted alliance.
"Our issue has been appropriate and prompt payment from the alliance to us for the care we render," hospital center President Myles Lash said last week. "This solution as it's currently constituted is clearly not working. We're worried not only for the provider sector but the entire city."
But city officials and alliance executives say the hospital center plan would threaten the viability of the alliance, shift the program's emphasis from outpatient care to expensive hospital services and give Washington Hospital Center a better deal than any other D.C. hospital.
Alliance Chief Executive Colene Y. Daniel said the hospital center was trying to get more cases qualified for higher reimbursement rates. For example, the hospital center wants to be paid at higher rates for trauma cases than the alliance offers, and it is expanding its definition of trauma to put more cases into that category.
Daniel said the hospital center still demanded the $4.5 million that wasn't paid in the first year of the program because MedStar failed to prove that all the patients live in the District and did not have other health insurance.
"We're trying to treat every hospital the same," she said.
For the second year of the program, which began June 1, the city and Washington Hospital Center have not agreed on a contract. As a result, when the hospital's claims for the first five months of that year were delivered to Daniel recently, she sent them back -- leading to the hospital center's withdrawal from the network.
City Administrator John A. Koskinen agreed with Daniel that the hospital center was seeking special treatment. "I may be frustrating them, but they have not managed to bully me yet," he said. "There's not a lot of free money lying around. These are taxpayer dollars, and we are obliged to provide the maximum amount of health care we can to the uninsured."
Bob Cosby, executive director of the Nonprofit Clinic Consortium, said he thought the hospital center's claims are part of a power play.
"There's a lot at stake, and the unfortunate part is that the folks who stand to lose the most are the folks who always do -- the poor folks who are seeking care," he said.