In addition to the loan monies requested above, individual hospitals must seek out an estimated $20-$30 million from private resources. Children's Hospital must raise, for illustration, a sum of $13,000,000. Georgetown University Hospital must raise over $3,500,000. The above funds are inclusive of the essential initial operation fund advance. IV. SIMILAR PROGRAMS IN CERTAIN STATES COMPARED TO THE DISTRICT OF COLUMBIA L Because it is a federal district, D.C. hospitals would receive through loans and grants from the federal government the funds normally provided by the States for health care facilities within their constituencies. V. STATUS OF LEGISLATION HR 6526-Companion Bill to S 1228 Passed by the Senate. The sponsors of HR 6526 find no objections to the amendments adopted by the Senate. Since the introduction of the legislation, because of a critical re-evaluation of the institutional financial abilities in terms of the current loan market and in order to make language fit current national programming, the following amendments are proposed. 1. Proposed Loan Authority Section. See Attachment A for working detail. 2. Proposed amendments: Add for clarity, line 2, page 2, "for medical centers" and the words. On line 3, page 2, add, "and medical" prior to the word "center". On line 13, page 2, add "and Title VII” in accordance with national program changes. ATTACHMENT A.-LOANS FOR CERTAIN HOSPITAL AND HEALTH FACILITY CONSTRUCTION Section (a) In order to alleviate hardship on any recipient of a grant under section () of this title, to assure the immediate planning and construction to meet demonstrated community needs, to meet Congressional directives to control the costs of health care services, and to meet increased constructional costs (over the estimated cost of such project on the basis of which such grants were made and those previously estimated) through no fault of such recipient, the Secretary is authorized to make a loan to such recipient not to exceed 50 percentum of such project costs, as determined by the Secretary if the Secretary determines that such recipient is unable to obtain such an amount for such purposes from other public or private sources. (b) Any such loan such be made only on the basis of an application submitted to the Secretary in such form and containing such information and assurances as he may prescribe. (c) Each such loan shall bear interest at the rate of 22 per centum per annum on the unpaid balance thereof and shall be repayable over a period determined by the Secretary to be appropriate, but not exceeding fifty years. (d) There are hereby authorized to be appropriated $40,575,000 to carry out the provisions of this section. VI. SPECIFIC QUESTIONS ABOUT H.R. 6526 1. Why should taxpayers of the other states supply funds to people of the District that are not available to the people in other states? The District of Columbia metropolitan area is a federally created being which serves all states. The people in the District metropolitan area should have the same opportunity to have proportionate medical center facilities that the 10 states represented by the members of this subcommittee have. The present Hill-Harris grant formula for the District prevents this. This bill makes the D.C. area residents who serve all states equal to the state citizens. The loan provision in the bill takes the place of state, county and municipal grants and bonds in these states. 2. Why do not the D.C. Hospitals and Medical Centers roll up their sleeves and raise the facility money? The D.C. Hospitals and Medical Centers have done this. They have struggled to raise money to meet operating deficits with some success. They will have to raise some $20,000,000 in addition to the funds in this bill for programs associated but not in this bill. Of special note is the effort of Children's Hospital requiring the raising of some $13,000,000. The fund raising potential to meet such capital requirements as provided by this legislation simply does not exist elsewhere. 3. Why do not private profit organizations such as Medi-center construct the extended care facilities? Two institutions in the District have considered this approach in depth and found it infeasible here. There are two basic reasons that militate against this approach in the District. The first is that the private entrepreneurs raise the per diem costs by cost of land and private borrowing rates and profits to the point that no sizeable economy would be available to the patients. The second reason is that the medical professions' affiliation and association with the existing medical care institutions make affiliation with a profitmaking corporation very difficult. The anticipated ease of transfer of patients has been the basic problem where such private motel-type facilities have been constructed. Re H.R. 6526. HOSPITAL COUNCIL OF THE NATIONAL CAPITAL AREA, INC., The Honorable B. F. SISK, Chairman, Subcommittee #5, Committee on the District of Columbia, Washington, D.C. DEAR MR. SISK: Your letter of June 20th requests some information which I regret is not immediately available in this office. After a conversation with Staff Clerk James Clark, I believe that the detail will be forthcoming from Dr. Granning of HEW who also testified at the hearing. I note, however, that under the Lanham Act, two District hospitals received a total of $5,655,000. Through 1966 a total of $7,194,000 has been made available by the Hill-Burton program. The Washington Hospital Center Act, with amendments, and special grants to each of the medical school affiliated hospitals have also been made. In response to your second question, I have included the cost information under a separate letter of this date. Again, many thanks for your help. WILLIAM M. BUCHER, Executive Vice President and Director. HOSPITAL COUNCIL OF THE NATIONAL CAPITAL AREA, INC., The Honorable B. F. SISK, Chairman, Subcommittee #5, Committee on the District of Columbia, Washington, D.C. Washington, D.C., June 24, 1968. DEAR MR. SISK: I have gathered additional financial data to illustrate the magnitude of that section of the hospital industry involved in H.R. 6526. Listed by hospital are the total annual operating costs as well as the most recent per patient day operating Costs. The range in operating costs is justified by the variable levels of quantity and quality of services, the composition of such services, the relationship with the medical center and other factors. 1. Children's Hospital of the District of Columbia: a. Patient days operating cost (1/1/68), $70.65 2. Morris Cafritz Memorial Hospital: a. Patient day operating cost (4/30/68), $78.71 b. Annual operating cost (fiscal 1968) 3. Eastern Dispensary and Casualty Hospital: a. Patient day operating cost (4/30/68), $58.59 a. Patient day operating cost (12/31/67), $80.69 5. Georgetown University Hospital: a. Patient day operating cost (5/31/68), $76.78 6. The Hospital for Sick Children, (formerly Children's Convalescent a. Patient day operating cost (12/31/67), $34.59 b. Annual operating cost (fiscal 1968). 7. George Washington University Hospital: a. Patient day operating cost (3/31/68), $71.43 S. Washington Hospital Center: a. Patient day operating cost (5/31/68), $80.35 Annual Operating Cost Total.. $6,939, 431 544, 349 3,878, 513 3.482.904 11, 454, 590 544, 349 11,800,000 22, 000, 000 68, 954, 737 As you well know, the operating costs many times exceed the construction costs of such an operation. I do hope the above information will be helpful to you. We all are indeed grateful to you for your assistance in moving H.R. 6526 through the legislative procedures. Sincerely yours. WILLIAM M. BUCHER, Executive Vice President, and Director. Hon. B. F. SISK, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, PUBLIC HEALTH SERVICE, Silver Spring, Md., July 10, 1968. Chairman, Subcommittee No. 5, Committee on the District of Columbia, U.S. House of Representatives, Washington, D.C. DEAR MR. SISK: Attached is some additional data in support of my testimony before the Committee regarding H.R. 6526 and S. 1228. The American City Bureau/Beaver Associates is widely respected in the area of fund-raising consultation, and we believe their information files and sources to be thoroughly reliable. The percentage of total campaign funds raised by the business community in each of the four cities of comparable size to Washington, D.C., further illustrates the wide gap in available community resources between the District of Columbia and other similar localities. We hope this information will be of use to the Committee. Sincerely yours, Enclosure. (s) HARALD M. GRANING. Note: Population was taken from the "Rand McNally Atlas," 43d edition, 1967; "Employee giving" (i.e., payroll deductions for pledges, etc.) is not included in these figures; all data was taken from the final campaign report, except for Newark, which was based on the campaign progress report dated June 12, 1968. |