New Children's Hospital to join North Arundel A larger partner to ensure the future

Health care

June 05, 1998|By M. William Salganik | M. William Salganik,SUN STAFF

Troubled by large losses and a small patient count, New Children's Hospital announced yesterday that it has successfully concluded its search for a larger partner and has signed a letter of intent to join the North Arundel Health System.

New Children's is licensed for 76 beds, of which 10.7 percent were occupied on an average day during the past fiscal year, according to state reports.

"We need a larger partner to continue to exist," said Agnes P. Nicholas, New Children's director of public relations and development. "That's just the way medicine has been going."

In searching for a parent, Nicholas said, "it was very important to the administration and the board of trustees to retain our identity, not just to be taken over by another system so the campus could be used for another purpose. Most larger systems had that in mind."

With North Arundel as a parent, she said, New Children's could proceed with plans to develop a 136-bed nursing home, a 120-unit assisted-living facility and an ambulatory surgery center on its 45-acre campus in Northwest Baltimore. She said there are no plans to close the inpatient unit.

"We're looking to expand, not to reduce programs," said Kevin Murnane, public relations director at North Arundel.

Nicholas said New Children's has 200 to 250 employees, who would be retained. She said the hospital had worked hard to increase occupancy, which is about double last year's.

Robert Murray, executive director of Maryland's Health Services Cost Review Commission, said much of that increase came because the hospital was keeping patients longer.

He said his agency had been concerned about New Children's care costs -- about 20 percent above the state average -- and its continued losses of $2 million to $3 million a year, which were eating into the hospital's endowment.

His regulatory agency had been planning a review of rates at New Children's with an eye to reducing costs but had deferred action because of the merger talks.

"If they keep the status quo in place, we'll have to take a much closer look at that institution," Murray said.

"It they close the inpatient unit, we would not have to take further action."

North Arundel Health System, based at 329-bed North Arundel Hospital in Glen Burnie, includes Mount Washington Pediatric Hospital, which is near New Children's. Murnane said the system was looking for space to expand some Mount Washington programs, and Nicholas said New Children's was seeking more pediatric services.

Founded in 88 years ago to treat children with chronic diseases such as polio, New Children's eventually turned its attention to orthopedic and rehabilitation patients -- including adults -- and developed a sports medicine specialty. It is well known for the Bennett Institute for Health and Fitness, which includes equipment for rehabilitation patients and handicapped children.

Murnane said no money changed hands in the merger. Robert A. Chrzan is to remain president and chief executive of New Children's. Nicholas said there will be an exchange of board seats, but North Arundel clearly will be the parent.

Pub Date: 6/05/98

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