Hopkins thinks Prudential link boosts health care

One on one

April 29, 1991|By Kenneth K. Lam -- Evening Sun Staff

One on One is a weekly feature offering excerpts of interviews conducted by The Evening Sun with newsworthy business leaders. Robert M. Heyssel, M.D., is president and chief executive officer of Johns Hopkins Health System.

Q. There have been recent reports about Johns Hopkins selling its health maintenance operations to Prudential Insurance and also about the closing of the North Charles and Homewood operations. Is this a move toward retrenchment for Hopkins from its previous expansion plans of the 1970s and 1980s?

A.Let me speak to those two things separately.

With regard to the decision to sell the insurance underwriting membership portion of the Johns Hopkins Health Plan to Prudential, that was a decision taken almost a year ago -- if we could find the appropriate buyer that we could have a long-term relationship with.

Based on where the insurance markets were going in the '90s, a single, small regional player was going to have more and more difficulty competing against large, nationally based insurers. Employers wanted to be able to offer, through one company, a string of insurance products ranging from traditional indemnity insurance to have the freedom of choice through the traditional HMOs-, PPOs-, managed care. I think if you look at the largest employers in this area, most of them by this time have gotten into those kinds of relationships. So if you take AT&T and Bell Atlantic as an example, which Prudential handles, that's exactly where they are. So we really felt that to compete successfully in that market was going to be very difficult. But on the other hand, we wanted to retain the delivery sites, the provider side of this, for ourselves. And that's exactly the relationship we have with Prudential. We have a 10-year contract with them.

So we're going to do what we think we know how to do best, which is as a provider of medical care across a broad spectrum, and Prudential will do the thing that they know best, which is to underwrite and insure and to market health insurance products.

With regard to the North Charles, and I again want to separate something here, we will maintain and really build Homewood North, which is the ambulatory [walk-in] care portion of that with the Wyman Park Medical Associates. We're only closing the acute, inpatient units. And we're doing that because it just didn't make any sense to continue to operate a small, undifferentiated acute medical surgical hospital in this climate, with everybody's occupancy rates down and so forth. It neither made economic sense for us to do; it was not a strategic importance to us, and so we decided to close that portion of it. . . . So this is not a retrenchment. If other opportunities came up that looked good to us, we would certainly take them. But, we really believe the future is in what we have now invested in, a major ambulatory care center and a provider side for us for managed care.

Q. Johns Hopkins is well known as the innovator of medical procedures throughout the country. However, a lot of politicians and health care observers would say that one of the problems with American medicine is we've fallen in love with advanced technology. I believe one statistic I heard recently is that there is more magnetic resonance imaging done in Maryland than in all of Canada. What can be done about that? Do you think that is a legitimate criticism?

A. I think it's a legitimate criticism to the extent that we have not very often first assessed the technology and where it is most useful so that it tends to get, I think, over utilized.

I think that on the other side of that, if we take MRI or CAT scanning before it, a lot of very evasive and sometimes truly dangerous, and commonly very uncomfortable procedures are simply done away with along with hospitalization that went with those. I guess the best example is probably. . . for discs and other spinal problems where people walk in in their street clothes and crawl in the MRI or the CAT [computerized axial tomography] scanner and get a diagnosis of a disc or some other problem without a needle being stuck in their spine, without going in the hospital for anything. So, I guess actually the ease of doing those things and the lack of danger just leads to people doing them much more rapidly. . . . And, yes, there probably are too many of the machines. . . . So I don't think there's any question that we have more than we need.

Now if you want to compare it to Canada, you might ask whether they've got as much as they should have. Their lengths of stay are a lot longer. There is queuing for lots of things and along the border. I understand Canadians with dollars are crossing the border to get things they can't get in Canada. So, someplace in between the wonders of Canada and the wonders of America, there probably is a middle ground and we haven't found that.

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