Dive Brief:
- Amid questions surrounding UMC's planned take over by Howard University Hospital and Paladin Healthcare Capital over a year ago, the hospital announced it will lay off 112 employees to help cut $10 million in expenses.
- The center's restructuring plan requires the hiring of Veritas of Washington, effective April 1, despite the fact no contract has been forwarded to the D.C. Council.
- Negotiations between Howard and Paladin have stalled for months, and Councilwoman Yvette Alexander (D-Ward 7) said the two organizations are unwilling to commit to taking over UMC for more than five years - implying this is not a satisfactory arrangement to Mayor Muriel Bowser.
Dive Insight:
However, Andrew Davis, UMC's interim CEO said negotiations are ongoing and restructuring cuts are necessary to prevent requesting additional subsidies in FY 2017. Alexander told The Washington Business News that she would still support the Howard-UMC deal but a new hospital building needs to be part of the final deal.
Huron Consulting Group, the District's previous operator is being questioned by Alexander, who says an audit should be conducted related to several senior officials being dismissed due to alleged improprieties. In addition, after publicly touting a strong performance under Huron's guidance, UMC reported a $3.5 million loss in the fourth quarter.
Wayne Turnage, the D.C. Department of Health Care Finance's director, said he wasn't surprised that UMC struggled without a full-time operator and pointed to low reimbursement rates based on the hospital's acuity levels along with a loss of 85% of market share to other hospitals for the hospital's financial problems.