Washngton Blade - December 19, 2008
Amy Cavanaugh

Citing a combination of declining revenue and an increase in patients coming to the Clinic for uncompensated health care, Whitman-Walker CEO Donald Blanchon said the cutbacks are a "practical reality of running a community organization in one of the worst economic times in 50 years."

Blanchon said private donations have slowed considerably, as have funds from government entities, which he noted have "their own deficits and won't have large funds to share with the Clinic."

"We're down 28 percent in private donations this year compared to 2007," he said. "For an organization that gets 30 cents of every dollar from private sources, to be down that significantly put us in a difficult position."

Blanchon said that the third major revenue stream is payments for insurance reimbursements.

"This includes things like Medicaid," he said. "If you look at third-party reimbursements, typically the reimbursement rate ... doesn't cover the cost of our care. It's difficult to do this work if the gap between the cost per visit and what you're getting from the insurance company isn't sufficient to close that gap."

Blanchon said Clinic leaders decided they wanted to focus on providing primary medical care, HIV and STD testing, and dental and mental health services. This means residential programs such as the Bridge Back Program, which has six patients, will end Feb. 28.

The Northern Virginia clinic is slated to close before April 2009, and the 1,010 patients who received treatment there this year will have the option to transfer to the Elizabeth Taylor Medical Center or the Max Robinson Center in Anacostia.

Blanchon said there were "fundamental issues with the public health infrastructure that were too difficult to overcome in 2009" at the Northern Virginia location.

About half the Clinic's 45 layoffs will come from closing the Northern Virginia location and the Bridge Back program, and the other half come from administrative cutbacks.

"We're going from 175 employees to almost 130 employees, and as we shrink our workforce to only be primary care, we don't need as much management since there's a smaller number to oversee," Blanchon said.

The administrative layoffs will happen by year's end, and the program layoffs will conclude by March 31. Blanchon noted that some additional positions would be created to generate revenue or to improve efficiency of operations.

The changes come six months after the Clinic announced the sale of its 1407 S St. property, which served as an administrative facility, and moved the offices to the Elizabeth Taylor Medical Center, where clinical services are provided.

Blanchon said of the $8 million earned from the property sale, $5 million went to "long-term and current liabilities" and the remaining $3 million was used to make infrastructure improvements and offset fundraising and grant losses.

Despite the Clinic's financial troubles, Blanchon said that turning away new patients was not an option.

"Given the current economy, this is when people in the community need us most," he said. "To have a waiting list for people who have just learned they are HIV positive and need treatment seems very foolish from a care perspective."

Other local clinics also have seen their revenues drop. Dr. David Haltiwanger, director of clinical programs and public policy at Chase Brexton Health Services in Baltimore, said officials there are "also concerned that with government budgets being tightened, we're seeing cuts in reimbursement for Medicare and Medicaid, while costs of operations are continuing to go up."

But he said the Chase Brexton "bottom line is still strong" and "we have not had any layoffs and don't anticipate having any."

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