GBMC, Sheppard Pratt team up Drug treatment programs merging

November 28, 1996|By M. William Salganik | M. William Salganik,SUN STAFF

An article in Thursday's Business section on the merger of the chemical dependency programs at Greater Baltimore Medical Center and Sheppard Pratt Health System incorrectly stated how much money the programs were losing. Between them, the programs were losing more than $250,000 a year.

The Sun regrets the error.

Greater Baltimore Medical Center and Sheppard Pratt Health System are merging their chemical dependency treatment programs, the two hospitals, on adjacent campuses in Towson, announced yesterday.

This is a step closer together for two institutions that have been exploring ways to save money by working together. For more than five years, there has been some psychiatric staff appointed jointly by the two, and they share a lab, a food service and even an employee picnic.


Executives of GMBC, a general hospital, and Sheppard Pratt, a psychiatric facility, said they will continue to look for ways to cooperate -- and that an eventual merger is not out of the question.

"We've had a very successful courtship," said Dr. Steven S. Sharfstein, medical director and chief executive of Sheppard Pratt. "Whether we get married depends on what's happening in the medical marketplace over the next few years."

For now, they are forming a nonprofit, 50-50 joint venture called Partners in Recovery to run the program, which will be housed at GBMC.

The two had been running similar drug-alcohol dependency programs -- each serving about 250 outpatients a year -- and, between them, losing more than $250 million a year, said Lynn Flanigan, general manager of medical psychiatry at the two institutions. Her joint appointment in January led to development of the shared program.

Neither of the programs ran at full capacity, and combining them will allow reduction of clinical staff from 12 to eight, Flanigan said. In anticipation of the merged operation, some positions that became vacant had been filled with temporary employees, and other excess clinical staff will be offered other positions, she said.

The result should be a 20 percent to 30 percent reduction in costs, Sharfstein said.

The joint program, which officially begins in January, is expected to lose money the first year, but break even or show a slight surplus by the second year, said Robert P. Kowal, president of GBMC.

Keeping costs down is important given the growth of managed care in mental health, Flanigan said.

She said more than half of the patients in the chemical dependency program would come from managed-care insurance plans, which already have been responsible for shifting almost all chemi- cal dependency treatment from inpatient care to an outpatient basis.

Making the hospitals' competitive position more difficult, Flanigan said, is that hospital-based services have rates regulated by the state and must charge the same to patients, while freestanding treatment programs -- the bulk of their competition -- can negotiate discounted rates with managed-care insurers.

Beyond the savings, Kowal said, "the product is improved by bringing the talents of both organizations together."

The Partners in Recovery program will offer a range of outpatient care, said Janice Leshinski, its director: partial hospitalization (most of the day spent at the hospital, going home in the evening), intensive outpatient (as much as three hours a day), down to weekly group sessions.

While there will be some effort to market the program to the public, Leshinski said, "we will focus our marketing efforts on those who are the gatekeepers" -- referring to doctors and managed-care organizations.

Pub Date: 11/28/96

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