Washington, D.C.'s publicly owned hospital will likely get a new operator after city leaders cut ties with the firm currently in that role. The governing board that oversees United Medical Center, a division within D.C.'s government, voted last week to move forward in a management relationship with New York-based accounting firm Mazars USA. The value of the contract was not disclosed. The D.C. mayor's office will need to approve a contract before it's official.
The D.C. City Council voted against renewing a management and operations contract with Washington, D.C.-based Veritas of Washington. Nonetheless, Veritas will stay on as the hospital's operator for 60 days to allow for a smooth transition.
Veritas received about $800,000 per month for its work, said Wayne Turnage, director of healthcare finance for the D.C. government and a UMC board member and head of its finance committee.
UMC has been in financial distress for years, and more recently has worked to recover after two widely publicized patient deaths. Under current conditions, including deteriorating admissions and a high proportion of Medicare and Medicaid patients, the facility is expected to operate at annual loss of $25 million, said David Umansky, a spokesman for D.C.'s office of the chief financial officer. The city council approved a $7 million grant for the hospital in December so it could continue operating, Umansky said.
Washington, D.C.'s chief financial officer, an independent office from the mayor and city council, must approve all contracts worth $1 million or more. Umansky said his office hasn't seen the proposed UMC contract with Mazars USA, but will likely need to sign off on it.
"They have to show us that they have the money to pay for this contract and where it's going to come from," he said.
In an interview with Modern Healthcare, UMC CEO Luis Hernandez attributed much of the hospital's financial struggles to the fact that many decisions are in the hands of the city, not hospital administrators. On a day-to-day basis, he said hospital administration doesn't know what's happening on the budget side.
"It's almost impossible to operate under those circumstances," he said.
Turnage reported that hospital revenue was down 12.8% in December 2017 year-over-year. He said that's because admissions took a dive following the news of the patient deaths—from more than 600 admissions in December 2016 to about 350 in December 2017.
"The admissions declines coincided almost perfectly with the public attention that was repeatedly brought to the problems," Turnage said. "Some of the problems were legitimate. Some of them were overstated, and some of them were presented incorrectly."