The city contracted with Veritas last year to manage UMC operations with the goal of ensuring the hospital stayed financially feasible as the city worked on a new hospital project.
But UMC continues to struggle financially — and last month implemented a 90-day obstetrics ward shutdown due to safety issues, reports The Washington Post. Furthermore, Veritas has not met all standards required by the city in their contract, according to the report, which cites public records obtained by The Washington Post.
D.C. Health Care Finance Director Wayne Turnage said Veritas “is expected to exploit any revenue enhancement opportunities that surface” and was projected to generate $9 million in additional revenue this fiscal year. However, hospital officials expect to see only about $1 million of that revenue realized.
But he points out the contract aims to ensure UMC is financially feasible as D.C. makes efforts to fund and build a new hospital, not to oversee a major financial turnaround. “Neither the operator’s contract nor hospital operations is funded at a level designed to substantially grow revenue in the long term,” Mr. Turnage said. “Such a plan would require millions of dollars to enhance the scope and depth of the hospital’s physician practice and millions more to renovate a building that is operating at or near 100 percent of its depreciated life.”
Overall, city officials estimate UMC will report a thin profit margin at the end of the year, according to the report. However, the report states, that is primarily attributed to billing improvements.
Veritas officials did not offer details about their $3.6 million annual consulting fee to The Washington Post, and Veritas Executive Chairman Corbett Price contends in the report his company is doing what’s been asked of them. Mr. Turnage expressed similar sentiments in the report, saying Veritas is making efforts to stabilize UMC.
UMC board members could make a decision on the contract later this year.
Read the full report here.
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