Cost-cutting studied at Homewood Hospital won't rule out layoffs, other reductions

February 13, 1991|By Sue Miller | Sue Miller,Evening Sun Staff

Layoffs are being considered at the financially strapped Homewood Hospital Center in Baltimore, which operates under the umbrella of the Johns Hopkins Health System, says the center's vice president for operations.

But Edward Chambers, the vice president, denied reports yesterday that 35 to 40 percent of the center's workers would be dismissed in the near future.

"That's absolutely not true," he said.

"Layoffs, other expense reductions and a conversion to other kinds of services are among a number of options that are under study" after a recent consultant's report recommended a

restructuring of Homewood and a reduction of its size, Chambers said.

Homewood ended the fiscal year ending June 30, 1990, with a loss of $3.7 million, according to last week's annual financial disclosure by the Health Services Cost Review Commission, the state agency that sets hospital rates.

Homewood projects a $4.3 million loss at the close of the next fiscal year.

"We have a spend-down agreement with Homewood Hospital Center that is pretty stringent," John M. Colmers, the commission's executive director, said yesterday.

Homewood is a high-cost hospital that has to become more efficient, he explained.

"That means they have to change what they are doing. They can do this, for example, by cutting the lengths of stay, by operating with fewer people or by a better job of purchasing supplies. How they respond is their business," Colmers said.

Under a spend-down arrangement, a hospital agrees to take steps to reduce its costs during a certain time period to avoid commission rate penalties, which would adversely affect its revenues.

Homewood represents a 1988 merger of the former Wyman Park Public Health Service Hospital and the former North Charles General Hospital. Patient services continue to be provided at both sites.

Homewood Hospital Center-North, a large clinic run by Wyman Park Medical Associates -- a 100-person physician's group -- serves a military population under a government contract with the Department of Defense and health maintenance organization patients. Psychiatric and addiction units also are there.

Most of the inpatient medical-surgical beds are at Homewood Hospital Center-South on North Charles Street.

"There are a number of contingency plans for expense reductions and marketing," Chambers said, declining to elaborate. "But the timing and the degree of the expense reductions will depend on an analysis and final decision by Dr. Robert M. Heyssel, who heads the Johns Hopkins Health System."

The Johns Hopkins Health System includes Johns Hopkins Hospital, Francis Scott Key Medical Center, Homewood and Johns Hopkins Health Plan. Heyssel also is the president of Hopkins Hospital.

In last week's hospital financial disclosure, Hopkins Hospital posted a profit of slightly more than $4 million and Key's profits exceeded $2 million.

Dr. Theodore King, president of Homewood, was not immediately available for comment. When asked about layoffs and any changes, Elaine Freeman and Joann Rodgers, the top-ranking public affairs officers at Hopkins Hospital, issued the following statement:

"Currently, Homewood Hospital Center-North is experiencing an increase in outpatients, in part, because of its commitment to provide care to retirees and dependents of the uniformed services.

"Homewood Hospital Center-South has been experiencing some decline in bed occupancy and, as a consequence, the Johns Hopkins Health System is conducting a careful review of needs."

Asked to be more specific, Rodgers replied, "They are trying to work out what needs to be done. We have been told that is all we can say at this time."

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