CAN IT BE that D.C. General Hospital -- rescued only a few years ago from the pits of medical care and transformed into an acclaimed and accredited success story -- might close down on July 1 for lack of funds? That is a distinct -- and terrible -- possibility. Projections point to a $10-million deficit for the current fiscal year. The D.C. General Hospital Commission, the independent citizens' group responsible for the facility's impressive recapturing of respectability, says that without full support from the city government, the hospital had best be closed. Commission members have so voted-- unanimously--and this doesn't appear to be mere budget-battle bluffing.

It also shouldn't have to happen--and we have suggestions for making sure it doesn't. Were it merely a matter of $10 million, surely a compromise prescription could be written to keep things going. That should happen, anyway; but one fiscal-year fix does not address the deeper question of what D.C. General should or should not be when it comes to medical care in the city. Commission chairman Gilbert Hahn Jr., who had preferred not to raise this issue publicly but who did respond to a reporter when the story became known, says the financial troubles are caused by a low occupancy rate, cuts in Medicaid and Medicare reimbursements and the use of staff doctors who do not bill patients directly.

If D.C. General should be kept going--and we believe it should--there are changes to be made in its functions and in how its doctors practice there:

* Many of the health services now provided by the city government could be turned over to D.C. General's management. This would mean more patients, and a chance at some savings through more efficient, coordinated laboratory operations.

* Doctors, who have been quick to offer support but reluctant to reorganize in a way that would make a difference, could agree to work under a "group practice" arrangement, by which D.C. General would not have to bear the expense of doctors' salaries (and civil service benefits) because the doctors would bill patients directly for services.

The alternative to keeping D.C. General as an acute-care facility would be to pay other hospitals in the area for such care. But how long do you suppose it would be before the charges for handling these cases at other hospitals started heading for the moon?

D.C. General's mandate is enormous: to treat all District residents, whether or not they can pay. Its management, from the commission to Executive Director Robert Johnson, has won high marks. The Barry administration, fresh into its own reorganization for a new term, and the D.C. Council, under new leadership, should recognize the importance of D.C. General by ensuring its financial stability, examining its lingering difficulties and supporting shifts in health service and medical personnel to continue a reliable, accredited and essential public hospital in the city.