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Thursday, June 12, 2003

Council questions Detroit Receiving's funding

Excerpts:But Leon Atchison, former board member of Receiving Hospital, told the council that money was being taken out of Receiving Hospital's reserve accounts and transferred to other DMC operations without approval of Receiving's board. He claimed the money was not being repaid, nor was the DMC paying interest on the "loans" made by Receiving.

"We recognize our responsibility to support the viability of the whole system, but I get questions about what is happening to our (reserve) account," Atchison said.

Atchison said Receiving's unrestricted cash reserves fell from $225 million three years ago to $37 million today "and even that might be gone now," he said.

The DMC has said it cannot continue to operate all of its hospitals without some form of public funding from the local, county, state or federal government. The DMC has identified Receiving as one of its most vulnerable hospitals because of the volume of free care it delivers to poor and uninsured people. Systemwide, DMC delivered $130 million in free care in 2002 with Receiving delivering $78 million alone.

[DMC Chief Executive Arthur] Porter said all reserves belong to the DMC since the separate hospitals formed an "obligated group" in 1986. He said money is transferred among the hospitals to help cover costs of operations and is used to pay interest on DMC's collective debt.

"Detroit Receiving and its financials are within the DMC organization," Porter said. "All monies are owned jointly and severally by all the DMC organizations . . . all DRH money was made for the entire institution."

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