Mr. Chairman, members of the committee, I appreciate your inviting me to testify this morning on the draft bill to establish an independent Federal corporation to operate St. Elizabeths Hospital. The Council's Committee on Human Resources and Aging, which I chair, has general oversight responsibility for the city's mental health programs, and I am therefore concerned about the impact any changes in the organization of St. Elizabeths Hospital may have on mental health services in this city.

DRAFT LEGISLATION

I believe this draft bill is a major improvement over the several previous bills that would merely have transferred the hospital from the Federal to the District Government. This bill creates a corporation with a five-member board of directors.

Three members of the board are to be selected by the Secretary of Health, Education, and Welfare, and two members by the Mayor of the District of Columbia with the advice and consent of the District of Columbia City Council. Such a board preserves the Federal involvement in the hospital, but admits much more local voice in the hospital's operation.

When I testified before this committee in May 1975 on this same issue, I mentioned that the Rome committee report recommended an independent mental health authority be established and that this authority operate St. Elizabeths Hospital and all other public mental health services and facilities in the District.

St. Elizabeths is not merely the equivalent of a State mental hospital for the District. It has always had a broader mandate, and I believe the corporate approach this bill contemplates, with the FederalDistrict mix, is therefore a more appropriate organizational structure.

ST. ELIZABETHS PRESENT STATUS

The transfer of the responsibility for operating St. Elizabeths to the new corporation will free the hospital from the many layers of bureaucratic supervision it now endures.

I checked recently on the organizational structure under which St. Elizabeths now works. I learned that St. Elizabeths is a part of the National Institute for Mental Health, which in turn is part of the Alcohol, Drug Abuse and Mental Health Administration, which is under the Public Health Service, which is part of the Department of Health, Education, and Welfare.

Thus, approval of any action St. Elizabeths superintendent wishes to take could require concurrence from the Director of NIMH, Administrator of ADAMHA, Director of the Public Health Service, Secretary of HEW, and finally the President of the United States. No acute care hospital should be forced to operate under such a cumbersome system.

The hospital's present status as part of HEW also, I am sure, has contributed to its funding and staff shortage problems over the past decade. When our committee studied the problems of District of Columbia General Hospital, we learned that District of Columbia. General's staff had often requested funds that were cut out of the budget as it worked its way through the executive branch.

Budget protocol then precluded the District of Columbia General administration from making their true needs known to the Council, the Congress and the community.

I am certain a similar situation has prevailed for St. Elizabeths, especially with regard to their capital budget. The result for both hospitals has finally been lack of accreditation by the Joint Commission on the Accreditation of Hospitals. A quality hospital requires sound financial support, and the best way to secure that, is a wellinformed governing board free to argue for the funds to meet the hospital's needs.

LEGISLATIVE RECOMMENDATIONS

Two sections of this draft bill do, I think, require some further study. Section 5 of the bill requires the Board to develop, within 2 years of the enactment of this bill, a comprehensive plan for the operation of the hospital. Section 5(b) requires the National Capital Planning Commission to transmit, within 1 year of the enactment of this bill, a comprehensive land-use plan for St. Elizabeths property which takes into account the needs of St. Elizabeths Hospital for such land area for its operation and any forseeable expansion or for other programs related to mental health research or treatment.

I don't think the National Capital Planning Commission can properly plan for the use of the site until the Board has determined the hospital's future needs, and I don't think the Commission should usurp the Board's planning functions. Therefore, I would suggest that section 5(b) be amended to require the NCPC plan to be filed within 1 year of the Board's filing of its comprehensive plan.

Section 9 of the bill covers the funding for the hospital. I have two problems with this section as it presently stands. Subsection (b) is, of course, only a sense of the Congress statement and does not actually require that the District of Columbia Government make contributions to St. Elizabeths in addition to payment for patient care. Nevertheless, I do not believe it is appropriate for the District to have to pay for more than the care of patients who are a public responsibility. I would urge this section to be dropped.

Section 9(a) will set the appropriations for the hospital for the next 3 fiscal years. As now written, the section provides no incentive to the corporation to maximize its revenue collections from sources other than the government.

Public hospitals are traditionally weak in this area. They receive government appropriations for their entire budget and are disinclined to worry about collecting from those who have insurance or income sufficient to pay for their care.

Generally, such revenues collected become part of the general government income, and do not return to the hospitals. Thus, there is no incentive for collecting on the part of the hospital, and no readily visible measure of the hospital's efforts to capture such funds.

As I stated in my testimony over a year ago, before transfer of the hospital is effected, its budget must be at a level sufficient to insure good care for all inpatients and meet the deficiencies in the physical facility cited by the joint commission.

The corporation board, however, should be expected to maximize collections from those with the ability to pay.

I suspect there are, for example, persons at St. Elizabeths who were committed by the courts many years ago and their families are still contributing to their care at the same rate set by that old court order. Those situations should, at a minimum, be examined to decide whether the corporation should seek authority for higher payments.

If the corporation is required to make these efforts, they will need staff with experience in financial management, and that should be taken into account in determining the level of these appropriations.

Mr. Chairman, I appreciate your courtesy in seeking our views on this proposed bill. This draft represents a conscientious attempt by your staff to meet many of the objections to and problems raised by earlier transfer legislation.

I hope you will call upon us at the Council if there are ways we can be helpful to you as you continue your work on this very important legislation.

Mr. HARRIS. Thank you very much, Mrs. Shackleton. As an old local government man, I was interested in your comments that by the time the Council sees the budget, the executive branch has sanitized it to the extent that you don't know what the original requests were and can't properly evaluate how badly the funding has been cut or how poorly the needs have been met.

Is that a fair summary of what you said?

Mrs. SHACKLETON. I would say that it is, Mr. Harris.

Mr. HARRIS. My experience with local government is that this type of department with its clients and constituency have always been able to make its needs known to me. They always actually knew-I always knew how badly the county executive had worked them over.

Somehow, those that were particularly interested in their program also knew it. Doesn't it work that way in the District of Columbia? Mrs. SHACKLETON. It does and it doesn't. There are various restrictions placed on the personnel of the departments who are really not supposed to deal directly with Council members.

As a matter of fact, systems have been set up whereby if our committee wants information from the Department of Human Resources, for instance, we are supposed to put in writing a request which then goes through the city administrator who then sends it to Mr. Yeldell who then sends it to whoever is supposed to respond and then it comes back through the same route.

Mr. HARRIS. You don't really put up with that, do you? That breaches all kinds of constitutional rights.

Mrs. SHACKLETON. We obviously have people come to us. Certainly in some of these mental health situations, there are community groups which are fighting the battles and do come to us.

But it is a problem. They are very secretive about these things.

Mr. HARRIS. I felt in my experience that I had detected some of that. I don't think that is good for government. The Council is composed of people with a gamut of interests representing the needs of the community.

I really think the Council needs to be able to go to department heads. or division heads or what-have-you and get them to tell what they actually think. I don't think that destroys effective administration at all.

I think it is possible that maybe this is one of the basic reforms that you should try to achieve. I don't know whether we can help or not. Mrs. SHACKLETON. We are working on it. I think as a result of negotiations with the Department that we are getting a little more back and forth dialog with people. But, basically, we don't have the opportunity to really get the whole flavor of what is there, or go out and make visits in the community and visit the sites and do our own investigation.

With limited staff and limited resources, we can't always do it.

REASONS FOR NONACCREDITATION

Mr. HARRIS. Knowing your work in the community and your experience in government, I very much doubt that a whole lot goes on that you are not aware of. Can I ask you straight off as chairperson of the Council's Committee on Human Resources and Aging, to what do you attribute the loss of accreditation of the local hospital, District of Columbia General and St. Elizabeths?

Mrs. SHACKLETON. I think it is a combination of over a period of time of shortchanging, budget freezes, and in the case of District of Columbia General with which I am somewhat more familiar operationally, I think there has been a management problem there that hopefully has been helped by bringing in a new administrator.

But for the past several years there has been no administrator of the hospital. Then there is the fragmented operation of the hospital whereby the personnel department is up town and the hospital does not completely have its own full responsibility in order to get personnel.

It has to go through DRH personnel. It can't go out and recruit its own people. I think that is one of the problems with the District of Columbia General. I assume that probably the same thing goes on at St. Elizabeths. The institution is not given full responsibility and therefore cannot be helpfully accountable for what goes on.

Mr. HARRIS. My experience has been with independent corporations running the local hospital rather than the local government running it directly. It used to be the conventional wisdom: "For God sakes, don't let the government run the hospital because they will make a mess of it."

I went through a period where one of my major efforts was to achieve coordination between the independent hospital board and the objectives of local government in the other areas that were not only ancillary to but directly a part of the mental health care delivery system.

Is there a danger in going the independent or quasi-independent corporation way for St. Elizabeths? Along with that, if there isn't, is that the way we should go with the District of Columbia General?

DISTRICT OF COLUMBIA GENERAL HOSPITAL

Mrs. SHACKLETON. Actually there is legislation before the council introduced by Chairman Tucker to set up the District of Columbia General as an independent hospital with appropriated funds from the District. I think we believe that that is the direction that it should

go to take it out from under this whole bureaucracy and give it its own independence, its own authority and then make it fully accountable. Mr. HARRIS. Would you be setting it up as a corporation or just as an autonomous agency?

Mrs. SHACKLETON. It would be set up with its own board of directors, a commission, which would be broadly representative of the community and the professionals. It would collect its own funds.

FUNDING

That is one of the problems, as I mentioned in my testimony, that there is no incentive to collect funds that are needed because they just go into the general District funds. For that reason, literally millions of dollars in District funds have been lost because of the lack of procedures to collect them properly.

Mr. HARRIS. When you talk about funds, do you just mean government funds? Are you talking about voluntary contributions also?

Mrs. SHACKLETON. I am talking about third-party payments and collection of medicaid and so forth. I believe that the same would be true with the St. Elizabeths Hospital, that that is the direction I believe it should go.

Mr. HARRIS. I can see your point very clearly. The additional point I would ask about is-we have had experience that when you do set up an independent agency like this, there are a great many contributions that can be made available to it.

There are many people interested in supporting a hospital from a community base, from a foundation base.

Mrs. SHACKLETON. I think that is true.

Mr. HARRIS. Do you think it is feasible to set a date for the transfer of St. Elizabeths Hospital to the District of Columbia government? Mrs. SHACKLETON. No. I don't think we can set a date until we are certain that there will be support to put the institution into condition to be run by somebody else. I think right now it would be handing us-well, it would be a disaster to hand it to us in its present state with the needs of many millions of dollars, I understand.

Even the funds that were requested by the President to go into the hospital to help improve it have not been appropriated.

I don't think that I would want to set any date. I think it would be purely dependent on if and when certain conditions are met.

INDEPENDENT MENTAL HEALTH DEPARTMENT

Mr. HARRIS. Does the council favor the concept of setting up an independent mental health department?

Mrs. SHACKLETON. Well, the council has not acted on it. I personally do favor something along those lines. I think we have had many requests and discussions from community groups that do favor that. I personally would see that as the way we would like to go.

However, the council has not taken any action on that so I am speaking personally.

Mr. HARRIS. Are there any other questions? [No response.]