Doctors Hospital, which only six months ago won District of Columbia government approval for a $19.3 million renovation project, declared bankruptcy yesterday and announced its intentions to shut its doors.
The 206-bed hospital at 1815 I St. NW, which is used largely by downtown-based doctors for their patients, employs 500 people. The largest privately owned hospital in the city, it has been locked in controversy with the city government over the last five years concerning its plans to expand and move to another location.
Its present facility is scheduled for demolition in June 1980.According to a bankruptcy petition filed in U.S. court here yesterday, the 40-year-old facility "is unable to pay its debts in full as they become due and payable."
A press statement announcing the hospital's intention to close said the decision was 'based upon the failure to arrange sufficient financing to accomplish renovation" of the Metropolitan Hotel at 1143 New Hampshire Ave. NW that it intended to take over for its new building.
The documents filed in federal court yesterday left unclear the precise amount of debt faced by the hospital.
At the same time yesterday, the hospital's parent company-- Washington Medical Center, Inc.,-- filed notice that it also is bankrupt. However, the company, which owns other real estate holdings, said it intends to stay in business and merely is asking permission to restructure its debts.
The medical center's filing indicated that the firm's overall holdings have book assets of $20.4 million, and that its liabilities total $18 million.
City health planning director Carl W. Wilson said he had not been notified of the hospital's intention to close and sohis staff had not analyzed what impact its closing would have on the city.
Wilson said, houever, that one requirement for the city's approval of the hospital's expansion plans six months ago was that his office be notified immediately of any changes in the hospital's financial plans.
He said the hospital's refusal to notify his office of its intention to close appeared to violate the terms of the approval.
One of the hospital's biggest users, the Group Health Association insurance plan, said yesterday that the hospital's closing gives it "an immediate problem" in finding alternative treatment facilities.
Dr. Edward Hinman, director of the prepaid health maintenance group, said the plan had 31 patients in the facility yesterday and last year admitted 2,258 patients there.
Hinman said his group accounted for about 30 percent of all of Doctors Hospital's admissions, and that its costs were lower that those at university-affiliated hospitals.
"If I have to put all my patients in George Washington (University Hospital) or Georgetown (University hospital) it will have quite a budgetary impact," Hinman said.
Hinman did not say specifically that the closing would have a direct effect on the rates charged by the insurance plan. But he said that the rates charged by Doctors Hospital are about $75 a day lower than university-affiliated institutions here.
The District of Columbia government's decision to grant approval to the Doctors Hospital renovation plan last March appeared to end a 10-year-old dispute that had focused on who would have financial and health care control over the new hospital facility.
The question was whether control would lie in the hands of Washington Medical Center, Inc. or American Health Services Management Inc., which had planned to take over the new building and lease it back to the hospital.
After lengthy discussions and negotiations, a settlement was reached that satisfied city officials that the hospital would maintain the quality and cost of medical services.
Doctors Hospital administrator Jay Wolfgang said yesterday that he was notified at 1 p.m. that the hospital's parent company was filing the bankruptcy petition.
He said the hospital had 135 patients yesterday and that plans would be made to transfer them to other facilities. He said he thought the hospital would be closed altogether within two or three weeks.
A recent study by the hospital noted that approximately 1,500 physicians have offices in the hospital's immediate vicinity, and that 625 doctors have privileges there.
"I think its likely some of them will move their practices" from the downtown area now that Doctors Hospital is closing," Wolfgang said.
He said no immediate plans have been made to relocate hospital employes.
An official of George Washington University Hospital expressed shock that the hospital was closing, but said there would be no immediate major impact on downtown health care.
The official, Dr. Dennis O'Leary, GWU dean for clinical affairs, said hospitals in the Washington area are not overcrowded, so any impact would be spread out through the area.
O'Leary said that the hospital's closing would make more nurses available for work in the Washington area, and would help alleviate a nursing shortage about which various hospitals have been complaining.
A court-appointed receiver will supervise the liquidation