If you want to buy a hospital with a history of losing money in an economically depressed part of the city, you’d better be willing to spend some cash.
That’s the takeaway lesson from the tale of George Chopivsky, 63, an entrepreneur who has been operating psychiatric hospitals around the country for three decades and now wants to buy the only full-service hospital in the District that’s east of the Anacostia River.
Chopivsky has spent a small fortune trying to better his chances of buying United Medical Center, the long-troubled hospital on Southern Avenue SE. It’s been a money pit for years and is on track to continue to be so—or else it’s recently started to turn a corner, depending on who you believe.
“I like a challenge,” says Chopivsky, who falls squarely in the former category and thinks he’s has the skills to make an underperforming hospital profitable. “I really do think—I’m convinced—that we can turn this thing around.”
The District took control of the hospital last summer, after Specialty Hospitals of America, the company brought in with the help of more than $80 million in city funding to save the former Greater Southeast Community Hospital proved it couldn’t. (One of Chopivsky’s companies is currently suing Specialty, and has won a $10 million arbitration award.)
Now Chopivsky is eager to convince the city’s leaders to hand him the keys to UMC, and by doing so enter into a partnership of sorts with a hospital that’s too important to the District’s overall health care apparatus for politicians to let it fail.
Chopivsky has been paying high-powered lobbyist David Carmen’s company $35,000 a month for help, lobbying records show. In total, Chopivsky has paid the Carmen Group nearly three quarters of a million bucks since 2009, though not all of that money has gone towards Chopivsky’s hospital-buying efforts.
Chopivsky has also hired Linda Greene, whom The Washington Post’s Reliable Source gossip column says is Mayor Vince Gray’s girlfriend, to build up goodwill in UMC’s neighborhood. According to the Office of Campaign Finance, which tracks lobbyist disclosures, Greene was paid $37,500 over a six-month period during the last half of 2010; she lobbied Gray and several councilmembers, as well as then-Attorney General Peter Nickles, last summer, according to OCF. Greene says much of her job was introducing Chopivsky to the powers-that-be east of the river.
“He’s a very nice guy,” says Greene (who tells LL she won’t discuss the nature of her relationship with Gray). Chopivsky says hiring Greene was part of his “due diligence” in getting to know the community served by UMC.
“I needed someone to introduce me,” he says, adding that Greene did a “damn good job” and saying that whatever her relationship is with the mayor is immaterial.
Chopivsky’s also been a generous political donor. He gave—either personally or through his company United Psychiatric Group—nearly $10,000 to local pols last campaign season. His donations include a $1,000 gift to Gray’s transition fund.
But will all this spending pay off for Chopivsky? Can he convince politicians to take a chance on a guy who has never owned an acute- care hospital and isn’t part of a wider network of hospitals that would offer more security, financial backing and peace of mind?
It’s too early to say, but Chopivsky’s got a couple things going for him. First and foremost is a group of powerful District officials, including Gray, Chief Financial Officer Natwar Gandhi, and Ward 2 Councilmember Jack Evans, who have all made clear they want UMC off the city books as fast as humanly possible. Bolstering their case are warnings from Wall Street that owning UMC might hurt the city’s bond ratings.
Standing in Chopivsky’s way, though, is At-Large Councilmember David Catania, who is on a one-man crusade to make UMC the greatest hospital on God’s green earth—and thinks Chopivsky is way out of his league and has “no business” trying to “swoop in” and buy a hospital so important to residents east of the river.
“I’ve yet to see the case for change,” says Catania, who has gone back and forth with Gandhi over what UMC’s true financial prognosis is.
Catania says UMC has turned the corner and is improving services on an almost daily basis. He wants it to be left alone for two years so it can prove to a hospital group like MedStar or Johns Hopkins that it’s a desirable asset. Under then-Mayor Adrian Fenty’s administration, he might have gotten his wish with little fuss.
But Gray has already started trying to push some of Fenty’s appointments off the hospital’s board, as the Post first reported this week. Catania probably isn’t doing himself any favors in terms of making political allies when he tells LL there are ways of managing health care in the District “without selling my people out. And that was intentional what I just said.”
While Catania’s sharp tongue might get him into trouble, Chopivsky comes with some legal and business baggage that might scare off some skittish pols.
Take for example, Berks Behavioral Health, a Chopivsky venture in Reading, Pa. In March 2008, the Reading Eagle ran a story about Berks’ plan to take over a struggling psychiatric wing of a hospital and expand it to fill a growing need for adolescent psychiatric services. Fast forward to the present—Berks is in bankruptcy court locked in a nasty legal battle with the hospital about who exactly is to blame for the failed partnership.
In one tartly worded filing, the hospital’s lawyer says “it was the lack of attention to the needs of their company and the incompetence of the owners and managers of Berks that are the reasons that Berks is in its current position.” Chopivsky says the hospital’s to blame, and Berks ultimately proved to be a successful operation that was sold for a profit last year.
There have also been problems in Kansas, where another one of Chopivsky’s ventures went bankrupt after a string of legal problems. The Chopivsky-owned Kansas Institute agreed in 1992 to pay more than $78,000 to settle a case brought by the Kansas Attorney General’s Office, according to the Kansas City Business Journal. Without the Kansas Institute admitting or denying wrongdoing, the settlement came after the attorney general alleged the Chopivsky venture had charged “patients for testing services that the attending physicians had ordered not to be performed.”
The institute was also dinged by the U.S. Department of Health and Human Services for not giving patients “a complete psychiatric evaluation that estimated intellectual functioning and orientation,” and one of its doctors was convicted of fraud, according to published accounts from Kansas.
When the Kansas Institute filed for bankruptcy in 1994, its lawyer said the action was taken because its bank was being unreasonable, but the hospital would not close. Less than a year later, the Kansas Institute closed its doors for good. Chopivsky says the Kansas Institute faced a “perfect storm” of cascading problems, particularly a bogus charge of sexual misconduct against one of its doctors, that led to the hospital’s demise.
Another Chopivsky enterprise, Dartmouth Hospital in Ohio, faced similar problems. A local watchdog group reported in 1993 that Dartmouth was charging $22,808 for each case of psychosis it treated, which was more than twice the average charged at surrounding hospitals. Chopivsky says he doesn’t remember the report.
Court and city records also show that Chopivsky’s been sued twice by former employees for failure to pay their wages and was slapped with a tax lien in 2000 for not paying more than $100,000 in District taxes. Chopivsky attributes the tax lien to a bookkeeping error he says was quickly resolved.
Chopivsky says he’s proud of his record as a businessman, and says the occasional “bump or scrape” in a lengthy career isn’t out of the ordinary and shouldn’t be any concern for the city’s decision makers.
“Things like this happen,” he says.
That may certainly be the case, but the episodes still give Catania more ammo to store in his own personal Alamo. “[Chopivsky’s] very good at making promises, it’s the execution where he comes up short,” Catania says.
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Photo by Darrow Montgomery