A buyer emerges for United Medical Center?
The auction Friday morning to sell United Medical Center was a perfunctory affair, as expected. With no private buyers on hand, the city's only hospital east of the Anacostia River was quickly turned over to the District government for $20 million in forgiven debt.
But just because no buyers showed up doesn't mean there aren't buyers out there -- even, surprisingly, for a financially troubled safety-net hospital.
One businessman in particular, George Chopivsky Jr., has emerged as a potential owner for the facility. His District-based business, United Psychiatric Group, has developed and operated some 20 mental-health facilities across the country.
He would be new to the full-service medical/surgical hospital business, but Chopivsky is no stranger to the United Medical Center facility. When the hospital was taken over by Specialty Hospitals of America in 2008, Chopivsky partnered with the new owners to operate a 150-bed psychiatric clinic at the hospital, deemed the "Center of Excellence in Behavioral Health Care."
That was part of a "medical mall" concept -- that by offering a broad range of medical services at the UMC property, each generating revenue for the core hospital, that would enhance the overall financial health of the enterprise. But Specialty moved in a different direction, investing in long-term acute care and skilled nursing facilities rather than in the psychiatric facility. Now Chopivsky is suing Specialty, and in written testimony delivered to the D.C. Council today, he wants another shot at turning UMC into a medical mall.
"The hospital was not and is not doomed to fail nor even doomed to a fate of continual subsidy," Chopivsky writes. "What went wrong was that the owners abandoned the concept of a full and robust suite of health care offerings that would leverage market forces to support a state-of-the-art hospital east of the river in favor of a much easier model -- milking the city dry."
His plan: "I have offered to buy the hospital for $100 million in
liabilities. This offer would take care of the outstanding bills, settle the claims that cloud the hospital's future and secure the repayment of the $49 million debt owed the city with more than $30 million in new funds. It would upgrade the facility with $12 million in capital improvements that would right size and improve the OB/GYN; operating rooms; ER; AIDS services, as well as install the new Center of Excellence for Behavioral Health Care."
It's a plan that isn't being dismissed out of hand by the prime movers in the District's takeover of the hospital -- Attorney General Peter Nickles and Councilmember David A. Catania (I-At Large). And Chopivsky has made aggressive moves to prove his bona fides, including hiring high-powered lobbyist David Carmen to press his case.
What he's fighting is a group of public officials scared of repeating the ill-fated, under-financed Specialty deal. In other words: "We're not eager to jump back in bed with the first person who comes along," said a staffer with knowledge of the hospital dealings.
Nickles says that his message to potential hospital owners is simple: "If you have a real interest, basically put your money where your mouth is." And he says that no one thus far has stepped up with the requisite cash -- including Chopivsky, who has secured $20 million and is in search of more. If he had shown up Friday with his current financing, Nickles says, "he would not have qualified" to bid. He adds that another party, Connecticut-based Paradigm Physician Partners, has also expressed interest in UMC.
"There are two things of vital interest to me," Nickles says. "Do they have the financial wherewithal to make this hospital a first-class institution, and are they committed to this institution as a great institution for the residents of Washington east of the river?"
In taking over the hospital, the city bought itself time to ask those questions. But if UMC's operating losses continue and politicians begin to face the prospect of having another D.C. General on the books, Chopivsky's answers might start to look more and more attractive.
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