Vna Finds Buyers

May 27, 1994|By Patricia Meisol | Patricia Meisol,Sun Staff Writer

The 100-year-old Visiting Nurse Association of Baltimore, weakened in recent years by competition from independent and hospital-run home health companies, is being acquired by a group of Maryland hospitals and medical companies.

The VNA is the largest home health company in Maryland, with $18 million in annual revenues and more than 170,000 home visits a year. For decades the charitable organization has been the major provider of care for the poor in their homes.

It had been seeking a buyer for at least a year as a way to raise cash and strengthen its organization for the future.

The agreement to buy the VNA was announced yesterday by two of the buyers, Doctors' Hospital in Lanham, Md., and Genesis Health Ventures Inc., a publicly traded company and the largest nursing home owner in Maryland. Terms were not disclosed.

The agreement involves a joint venture in which each of seven buyers has an equal share, 14.3 percent, and a seat on the board that will govern the new company.

The outright sale of a VNA to a for-profit organization is a rarity. In recent years, such associations have affiliated with hospitals and other providers around the country, but most arrangements have allowed the nursing group to retain its charitable status.

The Baltimore group has seen a drop in contributions as fund-raising efforts decreased, but it continues to receive funds from United Way and other groups to provide care to the poor.

Norman Taylor, president of United Way in Baltimore, said yesterday the VNA is doing a good job serving people who fall between the cracks of insurance programs. If the association becomes a for-profit company, he said, "we would certainly reassess their involvement in the United Way."

The majority of VNA patients are insured through Medicare or Medicaid programs.

The director of the VNA, Lynne C. Sennett, said the organization's foundation will continue as a philanthropic organization, monitoring community needs and using an endowment to care for the poor. She also said that cash from the sale would be used to continue its mission of caring for the poor.

For Genesis and some hospitals involved, owning a piece of the VNA is a chance to reduce costs. They now have a ready supply of nurses who can tend to recovering patients in less expensive home settings, allowing them to reduce patients' length of stays, Ms. Sennett said. Genesis' national plan is to assemble a range of care options for the elderly in its markets, and it didn't have home health care in Maryland where it has the largest concentration of nursing homes. One of its strategies to control costs is to move people out of nursing homes to their own homes and to care for them there, said George V. Hager Jr., chief financial officer of Genesis.

The Kennett Square, Pa., firm bought the Towson-based Meridian nursing home chain in September in a $205 million deal, making it the sixth-largest nursing home company in the country.

Mr. Hager said Genesis also hopes to benefit from its partnership with acute care hospitals in Maryland as it expands services here.

In addition to Doctors' Hospital and Genesis, the partners in the new VNA company are Harbor Hospital Center, Liberty Medical Center, and Sinai Investments Inc., all in Baltimore; Howard County Health Services, a subsidiary of Howard County General Hospital in Columbia; and a Bel Air medical supply company, Orem Medical Corp., whose president is on the board of a VNA-affiliated company.

No one at the hospitals contacted yesterday was available to comment. According to Ms. Sennett, the hospitals' combined home health business is about 50,000 visits annually.

xTC Ms. Sennett will remain in charge of the home health company, whose boundaries will expand into Anne Arundel, Prince George's and Montgomery counties as a result of the sale. The VNA's name will be changed to the Visiting Nurse Association of Maryland.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.