The state has given Union Memorial Hospital a six-month trial period to run a community psychiatric program taken over from financially troubled Homewood Hospital, a neighboring facility going out of business.
If the experiment goes well, Union Memorial will be able to assume control of the 35-bed program permanently, according to John Colmers, executive director of the Health Services Cost Review Commission. His agency approved the temporary takeover earlier this month.
Homewood lost nearly $3.7 million in 1990 due to changing patient needs and low occupancy rates, and is winding down its operations. Strong competition from rivals, including Union Memorial, also contributed significantly to Homewood's problems.
Run by the Johns Hopkins Health System, Homewood was divided into two entities -- Homewood Hospital Center-South, formerly North Charles General Hospital, and Homewood Hospital Center-North, formerly Wyman Park Hospital.
Union Memorial is located at 201 E. University Parkway, three blocks from Homewood North and the psychiatric unit. Union Memorial now finds itself in the unusual position of running a psychiatric unit located on the site of its vanquished competitor.
"It's not often that you have situations like this to begin with," said Taylor J. Watkins, vice president and chief financial officer at 350-bed Union Memorial. "The logistics of it, the management of it is very, very difficult. Providing service to an off-site location is always a challenge -- I don't care what business you're in.
"We're still in the early business planning stages of all of this," Mr. Watkins said. "In any type of situation, in anything we do we try to put together comprehensive business plans. This is a very unique situation, and that's why it's extremely important we take the next six months to properly evaluate all of the aspects of the transfer."
Should Union Memorial's trial period end successfully in November, it would then be allowed to transfer the psychiatric unit to its own facilities, said Mr. Colmers, whose state agency sets rates for 62 hospitals in Maryland. In the meantime, rates charged at the psychiatric unit remain unchanged, he added.
In addition to its involvement with Homewood, Union Memorial is in the midst of an extensive expansion program. It recently received a $42 million revenue bond issue to fund new physicians' offices, a nursing school and a day-care center.
Meanwhile, the cost review commission has granted final approval to a plan to alleviate Homewood's $7.8 million bond debt. Admission costs at each of the 62 hospitals under the commission have gone up an average of $5, Mr. Colmers said. He said the bond debt should be paid off within a year to three years.