Northwest is looking to merge Randallstown hospital looking for a partner bigger than it is

October 11, 1997|By M. William Salganik | M. William Salganik,SUN STAFF

Northwest Hospital Center has decided to seek a merger into a larger hospital system and is looking for a merger partner.

The Randallstown hospital, limiting the search to local hospital systems, said it would seek proposals from Greater Baltimore Medical Center, Helix Health, Johns Hopkins, St. Agnes, St. Joseph, Sinai and University of Maryland Medical Center.

Fewer and fewer hospitals are attempting to navigate the world of managed care alone. About three-quarters of Maryland hospitals have merged into larger systems or have other collaborations.

With HMOs and other managed care insurers putting pressures on price, hospitals hope to gain economies of scale and eliminate some duplicated services by merging. Also, the insurers are seeking contracts with large health systems, driving hospitals not only to merge with each other but also to acquire physician groups, nursing homes and other health providers.

One of the other remaining independent hospitals, Howard County General, announced last month that it, too, was seeking an affiliation. And St. Joseph Hospital said it was discussing possible ties with Upper Chesapeake Health System, which operates the two hospitals in Harford County, Fallston General and Harford Memorial.

There have been two hospital mergers in the past year: Liberty Medical Center into Bon Secours Baltimore Health System and Mount Washington Pediatric Hospital into North Arundel Health System.

Unlike Liberty and Mount Washington Pediatric, the 240-bed Northwest is in robust financial health. For the last fiscal year, it reported a $6.2 million surplus, for a margin of 7.5 percent, well above the state average of 6.2 percent.

Northwest says it expects to take about six months to select a merger partner. After the initial round of responses, it plans to cut down to a shorter list and review more detailed presentations.

In choosing, the hospital will keep in mind "our relationship with -- the community, medical staff and other members of the hospital family" and will remain "sensitive to the fact that we are a product of a community effort back in the early '60s to have a hospital in Randallstown," said Robert W. Fischer, hospital president.

The hospital is already a member of the loosely affiliated Maryland Health Network (along with Greater Baltimore Medical Center, Holy Cross, Montgomery General and St. Agnes), which does joint managed care contracting and is merging its home health operations.

Pub Date: 10/11/97

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