UM System purchases Deaton home Medical system buys long-term care facility by Inner Harbor

Price is not disclosed

Health services to be expanded after takeover

June 20, 1996|By Mark Guidera | Mark Guidera,SUN STAFF

The University of Maryland Medical System, which operates the University of Maryland Hospital, has purchased Deaton Specialty Hospital & Home, a long-term care facility located on South Charles Street at the Inner Harbor.

The purchase price for the 370-bed facility, located next to the Harbor Court Hotel, was not disclosed. State tax assessment records show the Deaton property and its building improvements were valued at $11.7 million in January 1994.

The University of Maryland Medical System (UMMS) plans to pay for the 250,000-square-foot facility out of its cash reserves, said Don Joyce, vice president for subacute services at UMMS.

"The Deaton purchase fits well into our strategy of creating an integrated health system in which patients can move in a seamless fashion from acute care to lower-cost settings for follow-up care with the same doctors," said Joyce.

Managed care and health maintenance organizations, he said, are driving this strategy by requiring alternative settings for health services that are less expensive than hospitals and nursing homes.

Dr. Morton I. Rapoport, president and chief executive officer of UMMS, said the Deaton purchase would help the private, nonprofit medical system strategically position itself in the competitive managed-care age.

He also noted that while the acute care business for hospitals is declining, the long-term care segment of the health care industry is on the upswing.

"The successful medical centers of the future will offer a full array of health services from primary care through long-term nursing care," Rapoport said in a prepared statement.

Until the deal to buy Deaton was signed Tuesday, UMMS did not have a long-term care facility.

Aside from the University of Maryland Hospital, which is allied with the University of Maryland Medical School, the other components of UMMS include rehabilitation services at Kernan Hospital, outpatient facilities for follow-up care in Howard County, Glen Burnie and Woodlawn, and a financial interest in Bay Area Health, a home health agency.

Deaton, which was one of the first major redevelopment projects in the Inner Harbor during the 1970s, offers several long-term care programs. They include a brain injury program, a ventilator program for people with degenerative or chronic lung conditions, and a dialysis program. Deaton also cares for elderly patients suffering from dementia or needing skilled nursing services, such as infusion therapy.

UMMS plans to begin mapping out a plan to add new services at Deaton. High on the priority list, said Joyce, will be adding sub-acute care programs, which are targeted to people not quite sick enough to be in a hospital setting, but needing therapy or care that is not available on an outpatient or in-home basis. UMMS plans to retain the Deaton name and its president for the past two years, Errol G. Newport.

For the most part, Deaton's patients have illnesses that have dug deep into their financial resources, and rely on Medicaid, the federal medical assistance program, to pay their medical bills, said John Sabatelli, pastor of Christ Lutheran Church, the founder and owner of Deaton since 1973.

He said the church decided to sell the facility to ensure "its long-term financial viability.

"We really believed that for Deaton that would be possible only as part of larger, integrated health system. Otherwise Deaton would go bankrupt," said Sabatelli.

The pastor said the church, which operated Deaton as part of its mission to the sick and poor of Baltimore, had four serious suitors vying for the facility since it was placed on the market in September 1994.

UMMS returned to the bargaining table about two months ago after initially stepping away from the deal, said Sabatelli.

He said the church considers UMMS a good fit for taking over Deaton because it met all of the major characteristics the church was looking for in a new owner: a non-profit organization with sufficient resources to keep Deaton open, and with a commitment to serving Baltimore's inner-city population.

Pub Date: 6/20/96

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