Church Hospital's future fuzzy

Money-losing landmark may be shut or sold, or endure a consolidation

August 07, 1999|By M. William Salganik | M. William Salganik,SUN STAFF

MedStar Health said yesterday that it is considering options for Church Hospital in East Baltimore, including closing it, selling it or consolidating services.

The hospital reported $3.4 million in operating losses for the 12 months that ended March 30. Licensed for 144 beds, it had 64 patients on an average day last year -- so few as to make efficient operation difficult.

The Church campus also includes 115 assisted-living beds, with an occupancy of 92 percent of capacity, and a 121-bed skilled nursing center, which is 98 percent filled. One of the options being considered would be to close the acute hospital, but retain other services, said John Marzano, a MedStar spokesman.

Church's 880 employees were told at meetings Thursday that the future is uncertain, he said.

Columbia-based MedStar is not conducting similar reviews of the other seven hospitals it runs in the Baltimore and Washington areas, Marzano said.

"The overall changing health care environment has resulted in a situation where providers, insurers and government agencies have determined that, based on Baltimore's population, there is an oversupply of beds," Marzano said. "Declining utilization and shifts to other areas require us as a health care system to review the future role of this hospital."

Marzano said, "There is discussion going on with Johns Hopkins regarding a possible business relationship." He said he was not aware of active discussions with anyone else about Church, "but the potential certainly exists."

Hopkins, a few blocks up Broadway from Church, is not interested in acquiring the hospital or its property, said Gary Stephenson, a Hopkins spokesman. "There are, and have been, discussions with MedStar about how to care for patients that have been served by Church," he said.

Marzano said MedStar hoped to make a decision about Church by the end of the year. Closing or selling the hospital would require regulatory approval, but, concerned about excess beds, state regulators have generally approved such changes.

Already this year in Baltimore, Liberty Medical Center stopped inpatient care, while continuing some outpatient services, and New Children's Hospital closed.

Larry Lawrence, a vice president of the Maryland Hospital Association, said hospitals in the state are under "just phenomenal" financial pressures. On one hand, he said, shortages of nurses and other staff are driving up costs. "At the same time," he said, "there is a demand by the regulatory commission and insurers that rates be held low."

Statewide, hospitals had a profit margin of just 1.7 percent for the 12 months that ended May 31, compared with 3.1 percent a year earlier and 4.6 percent two years ago. Pressures have been greatest on urban hospitals, which treat more uninsured patients, and on smaller hospitals.

Church, founded in 1858 by the Episcopal Church, is the second-oldest hospital in the city. (The predecessor of Johns Hopkins Bayview Medical Center opened in 1773.)

Edgar Allan Poe died in what is still Church's main building when it was owned by the Washington Medical College.

It merged into Helix Health in 1995. Helix, which owned five hospitals in and near Baltimore, in turn merged last year with D.C.-based Medlantic Healthcare Group to form MedStar.

In March, MedStar announced that it would operate the financially troubled hospital of Georgetown University.

Pub Date: 8/07/99

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