Hopkins buys Howard hospital $142 million deal continues medical consolidation trend

No staff, service cuts seen

March 19, 1998|By M. William Salganik and Dana Hedgpeth | M. William Salganik and Dana Hedgpeth,SUN STAFF

With the pace of hospital mergers in the region quickening, Johns Hopkins Medicine snapped up Howard County's only hospital yesterday in a $142 million deal.

"We were just too small to realize our dream, too small to realize our strategic vision." said Victor A. Broccolino, president of Howard County General Hospital. He said the deal represents an attempt to balance local control with the needs of the community hospital.

The Hopkins partnership will allow the 233-bed Columbia hospital to improve facilities, expand services and develop clinics throughout the county. All hospital programs and all 1,200 employees will remain, Broccolino said.

For Hopkins, it marks the first time it has joined with a private, nonprofit hospital, although it acquired the former Baltimore City Hospitals, now Johns Hopkins Bayview Medical Center, in 1984.

"We are not in the business of going out and buying community hospitals," said Dr. Edward D. Miller, chief executive officer of Johns Hopkins Medicine, which includes the hospitals and the medical school. "But they put themselves up for sale, and it was an important strategic opportunity for us."

He said the Hopkins system might acquire "one or two other strategic community hospitals," and is "very interested" in Greater Baltimore Medical Center.

GBMC is negotiating with its Towson neighbor, St. Joseph Medical Center, and the GBMC board is expected to decide next month whether to join St. Joseph.

Academic health centers such as Hopkins have been seeking partnerships with community hospitals to put themselves in better position to negotiate contracts with managed-care insurers and to "get patients through referral patterns," said Robert Connor, an associate professor of healthcare management at the University of Minnesota, who has written extensively on hospital mergers.

The merger of Howard County General into the Hopkins system "signals that the time is here for individual health care organizations to come together and organize themselves into regional integrated health systems," said Michael R. Merson, chief executive of Helix Health.

Such health systems include outpatient centers, physician practices and services such as home health care. Helix and St. Agnes Health Care were the other finalists as Howard County sought a partner.

Merger trend

About three-quarters of Maryland's hospitals have formed affiliations. And the remaining single hospitals are quickly announcing mergers.

A pending merger between North Arundel Health System in Glen Burnie and Mercy Medical Center in Baltimore would bring together two of the remaining independent hospitals.

Sister Helen Amos, CEO of Mercy, said hospitals such as hers "don't want to be standing when the music stops and all the chairs are taken."

Also pending is a merger between the five-hospital, Baltimore-based Helix and Medlantic Healthcare Group in Washington, which would create the largest health system in the Baltimore-Washington area.

Another independent, Northwest Hospital Center in Randallstown, has been reviewing proposals from potential partners.

Public relations director Gretchen Genello said yesterday that Northwest expects to make a decision next month and has narrowed its choices to GBMC, Helix, St. Joseph and Sinai Hospital. Hopkins was invited to submit a proposal, but did not, Genello said.

The flurry of activity puts St. Joseph in a position to become a dominant player in the northern suburbs. It could close deals in the next month with GBMC and Northwest, and last month announced an affiliation with Upper Chesapeake Health System, which operates both hospitals in Harford County, Fallston General and Harford Memorial.

Howard County General announced its intention to seek a "strategic partner" last fall. Since then, hospital officials have met with community leaders and residents to ease concerns that the hospital's merger with a larger health care provider would mean cuts in services and a loss of community.

"Given [that] Howard County General had made up its mind that it had to merge with someone, I can't think of a better choice than Hopkins," said state Del. Elizabeth Bobo, who had urged hospital officials to hold community forums during the negotiations.

But Alice Gretsch, president of the Howard County League of Women Voters, said: "Because of the nature of the size [of Hopkins], they're going to have to work very hard to make sure the community feel isn't lost in the transition. [Howard County General] was started by people in the community who bought bonds to make it what it is. We were run as a local entity, strictly in the county. Now it's going to have a larger owner, whose management and operations base is in the city."

Management structure

Howard County General will keep its board, although Hopkins will name one-third of the members. The Howard board will make recommendations to the Hopkins board on key decisions, such as the budget and appointment of a CEO, Miller said, "similar to how we run Bayview."

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