Hopkins' $130 million gamble

November 26, 1993|By Richard O'Mara | Richard O'Mara,Staff Writer

Another article Friday about the Johns Hopkins Outpatient Center incorrectly reported Dr. Michael M. E. Johns' title. He is dean of the Johns Hopkins Medical School.

The Sun regrets the errors.

When Johns Hopkins opened its Outpatient Center in East Baltimore last year, it marched eyes open into medicine's new era. On that everyone agreed: outpatient care is the way ahead.

"It is the handwriting on the wall," said Dr. Michael M.E. Johns, chief of the Hopkins Hospital and Medical School. "By the year 2000 it will represent 50 percent of all care given in this country."


The Outpatient Center was the strategy Hopkins devised to tap into a growing market, which could help expand its roster of patients and thereby ensure its survival in this changing world.

Today, with the Outpatient Center a year-and-a-half in operation, a few cautionary questions are being raised. Some physicians worry that "the culture" of Hopkins could be changed from one that concentrates on cutting-edge research and teaching to one perhaps too preoccupied with the delivery of care.

Growing financial pressure

Like other urban research hospitals, Hopkins finds itself under growing financial pressure. It offers high-cost medicine, serves many poor patients who can't pay their bills, and faces growing competition from other hospitals, particularly in the suburbs. In aggressively expanding outpatient services -- a small center is also planned in Lutherville -- Hopkins follows other research institutions such as Columbia-Presbyterian Medical Center in New York and Yale-New Haven hospital.

The outpatient trend is driven by the need to bring down the soaring costs of medical care by limiting hospital stays. Under President Clinton's proposed reforms, which would provide health care to all Americans, the need for cost savings will be even greater.

Hopkins did not venture timidly into what is perceived as medicine's future. Its first step was a big one, and very expensive.

It assumed a debt of $130 million to build the Outpatient Center. The School of Medicine signed for $60 million of that, and the Hospital for $70 million. It is debt that must be retired from physicians' fees earned in the center, the hospital and the medical school.

Which is to say, if the Outpatient Center does not succeed as a business, there won't be much of a future for Hopkins at all.

Said Dr. Dana Frank, assistant professor of medicine at Hopkins: "If Hopkins is not completely successful in the delivery of health care, the institution will shrink. Money for bench [research] work is already shrinking. . . . If we don't respond to the current issue of health care we are going to be lost."

Is the center successful? Several of Dr. Frank's colleagues gave unoptimistic prognoses. Two physicians even referred to the Outpatient Center as "a white elephant."

Some criticize expense

Patients avoid it because the neighborhood is unsafe, said one cardiologist. The Outpatient Center is too expensive a venue in which to treat patients, a gastroenterologist complained.

"They [Hopkins] charge me $30 per patient," he said. "That means when I charge a patient, say a Medicare patient, $25, I'm losing money. The bottom line is that it is just too expensive to see patients there." He, like the cardiologist, asked not to be identified because of his continued association with Hopkins.

Other doctors, however, said they found the center "a pleasant place to work," and reported that their patients found it convenient and efficient.

Steven H. Lipstein, the administrator of the Outpatient Center, stressed its success. Some 1,200 patients a day move through the Outpatient Center, he said, 800 for doctors' appointments and 400 for "ancillary procedures," such as same-day surgery, X-rays and testing. The patient flow, he said, is what was projected.

He credited the center with contributing to the 3.7 percent increase in fiscal 1993 over 1992 in hospital discharges, and the "improved profitability" of the School of Medicine as well. Revenues from outpatient services in the hospital and Outpatient Center rose about 3 percent in fiscal 1993, said Mr. Lipstein. He added that total outpatient volume is growing.

The questions raised about a possible shift away from the institution's traditional focus on teaching and research are perhaps more troubling. Does the trend toward better and less expensive health care -- which Hopkins is trying to keep pace with in that immense steel, brick and glass building on North Broadway -- threaten to undermine these missions?


The Outpatient Center is a lavish building. It has marble floors; it is done in muted, un-hospital-like colors. Its lobby is bright and soaring, with soft, comfortable furniture. More importantly, perhaps, the staff is trained to offer patients the efficient and friendly service Hopkins' patients of the past did not always experience, according to several physicians.

Even so, there are those not entirely dazzled.

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