AS CITY LEADERS and the bankrupt Doctors Community Healthcare Corp. scramble to find ways to keep Greater Southeast Community Hospital afloat, they should also find time to weigh advice from the D.C. Council on what should come next. Clearly, judgments advanced last year by the now-defunct financial control board and the mayor about his plan to shut down the city's only public health hospital, D.C. General, and privatize health care for the poor were seriously flawed. But when it comes to misjudgments about the ability of Greater Southeast Community Hospital and its parent, Doctors Community, the mayor and financial control board, it turns out, are not alone.
Early last year, the council, prompted largely by David A. Catania (R-At Large), unanimously questioned the financial stability of Doctors Community and its principal backer and lender, National Century Financial Enterprises. Citing Doctors Community's indebtedness, lack of profitability, for-profit status and financial ties to the controversial National Century, Mr. Catania contended that "it would be unwise to entrust [D.C. General Hospital] to this company." Calling Doctors Community and its relationship with National Century a "shell game," Mr. Catania warned that Doctors Community "has a reputation for its inability to complete deals." And in return, Mr. Catania and the council got, well, guff.
Denying Mr. Catania's contentions, Doctors Community owner Paul Tuft in March 2001 declared that National Century "has never defaulted, had a downgrade or lost a rating in its history." That much was true at the time. Three weeks earlier, Moody's Investor Service had awarded a debt offering by National Century the top AAA rank for most of the issue and another prime rating for the rest. Moody's analyst William Black said, "We think very highly of them within their industry." Moody's continued awarding prime ratings on debt offerings by National Century through August. It downgraded notes issued by National Century only this month, less than two weeks before National Century filed for bankruptcy protection in Ohio.
So much for Wall Street rating agencies.
Mr. Catania, suing to block last year's deal, sought to obtain a copy of a spring 2001 PriceWaterhouseCoopers analysis. The city objected and the court threw out Mr. Catania's suit. That analysis should be made public -- now.
So much, too, for Thomas Scully, former president of the Federation of American Hospitals, the national trade group of for-profit hospitals such as National Century, who said last year: "Two or three years from now, everything will be fine, and health care service in the city will probably be better."
Today, the future of the city's privatized indigent health care system is in doubt, medical providers are being pulled off the job, and Washington Hospital Center -- the largest hospital in the system -- has announced that it will cease caring for non-emergency indigent patients, because of millions of dollars in nonpayments. Could this have come about because officials at the top wouldn't listen? They had better pay attention now.