Sinai board set to OK Levindale merger today Resulting system expected to offer full range of services

June 13, 1996|BY A SUN STAFF WRITER

Sinai Hospital's board is expected today to approve a merger with the Levindale Hebrew Geriatric Center and Hospital, a linking that hospital executives say will create a health care system with a full spectrum of services.

The merger between the 466-bed Sinai and the 288-bed Levindale, located across the street from each other on West Belvedere Avenue in Northwest Baltimore, also is expected to make the pending Sinai Health System an attractive choice for health maintenance organizations (HMOs) in an industry increasingly dominated by managed care.

"Now we really will cover the gamut of health care services," said Warren Green, Sinai's president and chief executive officer. "It will provide a seamless way for patients to receive care and makes the system attractive for managing care contracting."

With Levindale, Sinai intends to establish a long-term care division, and the two institutions will also likely share clinical, educational and research facilities, Green said.

The Sinai/Levindale merger, slated for completion by July 1, was approved Tuesday by the Maryland Health Resources Planning Commission. If the Sinai board blesses the move, the combination would still have to be approved by The Associated: Jewish Community Federation of Baltimore, which owns the land and buildings occupied by the hospital.

The Sinai/Levindale merger was one of two such pairings the commission approved, with the other involving two Eastern Shore hospitals.

The affiliation between the 110-bed Dorchester General Hospital Cambridge and the 183-bed Memorial Hospital in Easton also is a move expected to reduce costs, counter declining occupancies and brace both for anticipated industry changes.

"The changing world of health care is being dictated by payers of services and the need for efficiency," said Kenneth A. Richmond, Dorchester General's president and chief executive. "We're doing what business all over the world is doing now to take advantage of critical mass so that we'll be a survivor in the future. The days of the free-standing, independent hospital are going the way of the dinosaur."

In addition to pressures from managed care, hospitals' desire to merge also results from regulatory changes. Beginning in January 1997, for instance, some 450,000 Maryland Medicaid recipients are slated to be shifted into HMOs.

Those numbers provide strong incentives to hospitals eager to either gain new patients or avoid losing existing ones to adopt managed care practices and eliminate excess or duplicate expenses through mergers.

"Managed care is and will be the key driving force in determining how hospitals and doctors and nursing homes work together," Sinai's Green said.

Neither Green nor Richmond would estimate projected savings from their mergers, however.

The teamings of Sinai and Levindale and Dorchester and Memorial are the latest in a wave of health care mergers. In the past year in Maryland, Helix Health, Bon Secours Health System and other providers and insurers have partnered to strengthen their competitive positions.

In all, nearly half of the state's 52 hospitals have aligned themselves with others to capitalize on emerging industry trends, according to Maryland Hospital Association data.

Pub Date: 6/13/96

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