Local hospitals discuss link Maryland General, UMMS hold talks on 'business affiliation'

Health care

August 19, 1998|By M. William Salganik | M. William Salganik,SUN STAFF

University of Maryland Medical System and Maryland General Health Systems announced yesterday that they are in talks that could lead to a "business affiliation."

Maryland hospitals have been merging rapidly over the past few years, but they have also formed other kinds of alliances. UMMS and Maryland General, for example, have negotiated nonmerger deals to do Medicaid contracting.

In yesterday's joint statement, they said they "are exploring a wide range of potential affiliations."

The two set October as the target for deciding whether and how to join forces but said the deadline could be extended.

Officials of the two hospitals indicated that the talks do not include consideration of closing any services at Maryland General. Whatever the final arrangement, the statement said, Maryland General "will remain a community hospital whose future success will continue to be based on its relationship with its current community-based medical staff."

Academic medical centers -- hospitals affiliated with medical schools, such as UMMS -- have many faculty physicians practicing on campus full time. Community hospitals, such as Maryland General, depend primarily on doctors based in the community who admit patients. As managed care has become the dominant form of health insurance over the past few years, hospitals have merged in an effort to package services for HMOs and to seek cost efficiencies.

Beyond the general merger trend, academic medical centers locally and nationally have been looking for affiliations with community hospitals. Johns Hopkins Medicine acquired Howard County General Hospital in Columbia in March and conducted talks, which did not come to a conclusion, with Greater Baltimore Medical Center in Towson.

UMMS submitted proposals to two community hospitals that were seeking larger partners: Howard County (which chose Hopkins) and Northwest Hospital Center in Randallstown (which decided to merge with Sinai Hospital).

"In the old world, you had fee-for-service, and people would call on you as they needed you," said Dr. Elias A. Zerhouni, executive vice dean of Johns Hopkins Medicine. With managed care, "you're called on to manage diseases, and you have to treat the patient in the right place at the right cost."

Costs at community hospitals generally are lower than those at academic medical centers, where patient fees help support teaching and research.

A tie with a lower-cost hospital not only would make UMMS more attractive to managed-care insurers, but also could increase patient referrals for complex specialty care. Maryland General could gain more specialized medical expertise and more access to capital.

Maryland General is at the northern end of the Howard Street corridor in downtown Baltimore. UMMS, at the southwest corner of downtown, has been active in the West Side Task Force, which presented a renewal plan for the corridor to city officials this summer.

Besides its 747-bed University of Maryland Medical Center, UMMS owns Kernan Hospital, an orthopedic and rehabilitation facility acquired by merger in 1986, and Deaton Hospital in West Baltimore.

Maryland General is a 300-bed hospital. It also owns four primary-care centers and a half interest in Maryland Physicians Care, a Medicaid contracting organization.

Pub Date: 8/19/98

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