New Children's ending its hospital status

Deal with LifeBridge keeps some services

April 01, 1999|By M. William Salganik | M. William Salganik,SUN STAFF

New Children's Hospital would end hospital operations under an agreement with LifeBridge Health announced yesterday.

Troubled by losses of millions of dollars a year and low patient volume, New Children's has been seeking a merger partner for more than a year. State regulators, concerned over high charges at the hospital, pushed for action, and New Children's responded by closing its inpatient beds last month.

Under the agreement, New Children's will transfer its endowment and other assets, valued at $20 million, to Sinai Hospital, a LifeBridge facility near the New Children's campus. The endowment will support Sinai's pediatrics department, which will be renamed Children's Hospital at Sinai.

The Bennett Institute, a health club and rehabilitation facility on the New Children's campus, will remain open, managed by the LifeBridge division that runs Sinai WellBridge Health & Fitness, a similar facility in Pikesville.

LifeBridge also plans to continue to operate a doctors' office building on the New Children's campus. A building for assisted living for the elderly, being developed on the campus, will proceed as well.

The agreement, expected to become final at the end of the month, must gain the approval of both boards of directors and the state Health Resources Planning Commission. But Warren A. Green, chief executive officer of LifeBridge, said, "Both boards have been working very closely together," and that there did not seem to be any unresolved issues.

New Children's has about 80 employees. The hospitals said there would be some job loss, although some staff will remain to operate the Bennett Institute and there will be an effort to place staff into LifeBridge vacancies. Robert Chrzan, president and chief executive officer of New Children's, has been offered a senior executive position with LifeBridge.

Besides running Sinai, LifeBridge operates Northwest Hospital Center in Randallstown and Levindale Hebrew Geriatric Center on the Sinai campus.

Children's opened in 1910 to care for children with polio and other chronic diseases. As such diseases declined, it began caring for adult orthopedic and rehabilitation patients, eventually modifying its name to New Children's Hospital.

Licensed for 76 beds, it had fewer than 10 patients a day in recent years, and the annual losses were depleting its endowment. Seeking a deal that would keep the hospital open, it tried to merge last year into North Arundel Health System, but the deal never materialized.

It talked with other potential partners as well. "We've had very serious conversations for a long period of time," Chrzan said yesterday. Finally, it agreed to a deal that would close the hospital and devote the endowment to caring for sick children.

"It couldn't generate the critical mass to make that hospital successful," Green said. "Small hospitals in big cities all over the country are not surviving in their original form."

Although New Children's had been losing money, Green said, the ending of the hospital operations and the transfer of the endowment would mean "a substantial financial strengthening of LifeBridge."

He said he thought the Bennett Institute could benefit from joint management and marketing with Sinai WellBridge.

Sinai, Green said, plans to use some vacant space in the doctors' office building for administrative offices, and hopes to lease other space to Sinai-affiliated doctors. He and Chrzan said they had not decided what, if any, use would be made of the old main hospital building. Both said no date was set for halting remaining hospital operations.

Pub Date: 4/01/99

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