More hospitals weigh the urge to merge Improving services: Survival is driving local medical facilities to join forces and reduce surplus of beds.

November 24, 1998

MARKET forces are proving more powerful than regulatory commissions in getting hospitals to eliminate unused hospital BTC beds. That's good for area residents: Excess beds soak up millions of dollars in overhead that could be better employed to lower hospitals' high rates and expand medical services.

Look what has happened in recent weeks. Liberty Medical Center is eliminating its 282 beds and consolidating inpatient services at nearby Bon Secours; Maryland General is in the final stages of affiliating with University of Maryland Medical Center; New Children's Hospital may be stripped of its 76 licensed beds; and Northwest and Sinai hospitals have joined to save costs and pool medical resources.

Dramatic changes in hospital payments are behind the deals. Demands by managed-care insurers to lower costs and shorten stays have squeezed profits and reduced occupancy rates. Hospitals are searching for ways to reinvent themselves as full-service medical providers with far fewer inpatient beds.

Consider the reasons behind the Liberty-Bon Secours consolidation. Instead of running two hospitals with a 65-percent vacancy rate -- a money-losing proposition -- the system could reduce its beds from nearly 500 to just 150 at one site.

This should save enough money to offer new services at Liberty, including dialysis units, a geriatric psychiatric program, senior day care and housing for low-income seniors.

New Children's is expanding outpatient programs, even as it concludes merger talks with North Arundel Hospital. During the past two years, it lost nearly $7 million and had an average daily vacancy rate of 85 percent. With a vibrant Sinai Hospital down the road, running a little-used 76-bed hospital makes no sense.

The Sinai-Northwest merger is viewed by experts as an ideal grouping. The two share communities and physicians. As LifeBridge Health, the merged hospitals can provide a broader array of health-care offerings, combined resources and shared medical expertise.

Estimates show that the Baltimore region has 2,000 unneeded hospital beds that are very costly to maintain.

With patient days expected to drop by 25 percent in the next five years, the urge to merge could be with us for some time.

Pub Date: 11/24/98

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