The financial status of the District's only hospital east of the Anacostia River have improved since the city took over the facility in July, but it still has a rough road ahead, D.C. Chief Financial Officer Natwar Gandhi said.

"Since taking ownership of the hospital, the District has made significant efforts to keep the hospital operational, to improve the hospital's services to the community and to stabilize its financial position," Gandhi testified before the D.C. Council Thursday morning.

The biggest improvement has come from the city helping United Medical Center getting about 20 percent more in Medicaid payments, adding about $10 million to the hospital's ledger.

Depsite the improvements, Gandhi said UMC remains unstable. The hospital is routinely short on cash, causing it to be late on payments. And its internal budget for the current fiscal year estimates a $123 million budget that relies heavily on unproven revenue resources, he said.

Gandhi reminded the council that the District's stake in UMC threatens its own credit rating.

"In its most recent credit ratings report, Standard and Poor's specifically cited the acquisition of the hospital and its potential need for futher subsidy as factors that could negatively impact their assessment of the District's financial strength," Gandhi said.