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Posted at 10:42 AM ET, 07/ 9/2010

D.C. buys troubled SE hospital

By Lena H. Sun

The city now owns United Medical Center, the only hospital serving residents east of the Anacostia River, after bidding $20 million for the beleaguered facility after no other offers were made during an auction Friday.

The sale, on the steps of the John A. Wilson Building, took less than five minutes before Richard Amato, a senior assistant general who acted as auctioneer, gaveled the sale closed. The move was expected and follows months of wrangling between the city and Specialty Hospitals of America, the previous owner of financially struggling United Medical Center.

A judge rejected Specialty's attempt this week to stop the imminent foreclosure, part of the city's plan to seize control of the hospital from the for-profit company and put it under the authority of a District-appointed board. United Medical Center, formerly known as Greater Southeast Community Hospital, has long struggled financially.

The District's chief financial officer has warned city officials about the likely fiscal risks of taking control of the hospital, warning about the "negative impact on the District's budget and financial plan."

The city's previous experience in running D.C. General should serve as a cautionary tale, experts have said.

Specialty gained ownership of the hospital in 2007 under a deal engineered by D.C. Council member David A. Catania (I-At Large). The deal prevented closure of the facility and called for Specialty's managers to co-manage the hospital.

The city has spent tens of millions of dollars to modernize the facility in the past 2½ years, and city officials said in recent court filings that Specialty led them to believe the long-troubled hospital had stabilized financially. But behind the scenes, city filings said, the hospital had been losing about $1 million a month and had run up at least $20 million in debt.

By Lena H. Sun  | July 9, 2010; 10:42 AM ET
Categories:  DC  
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WoW!

Posted by: drfields | July 9, 2010 10:27 PM | Report abuse

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