N. Arundel, UMMS in merger talks

Possible joining of community and teaching institutions

`We don't have details yet'

Such marriages a national trend in the 1990s

Health care

January 15, 2000|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

The University of Maryland Medical System and North Arundel Health System said yesterday that they are discussing a possible merger.

The two health systems released a one-paragraph statement saying they have alerted their employees, and a letter of intent has been signed to allow the two to exchange information.

UMMS and North Arundel officials said a confidentiality clause in the letter of intent prohibits them from commenting on the talks.

"As soon as we go through due diligence, we will discuss the plans further; we don't have details yet," said Kevin Murnane, spokesman for North Arundel Hospital System.

Joan Schnipper, spokeswoman for UMMS, said the due-diligence period of close financial examination could last 90 to 120 days.

UMMS includes the UM Medical Center downtown and three community hospitals.

North Arundel Health System, based at the 329-bed North Arundel Hospital in Glen Burnie, includes four outpatient centers.

Hospital mergers became a major national trend in the 1990s, said Nancy Fiedler, spokeswoman for the Maryland Hospital Association. Most of Maryland's 49 acute-care hospitals have merged or created a close affiliation with other hospitals, she said.

Shrinking hospital reimbursement rates, coupled with fewer hospital admissions, have reduced the number of inpatient beds needed, which sparked a wave of mergers.

"Hospitals are trying to find partners that have something that benefits the other, and, ultimately, the community," Fiedler said.

The benefits for a teaching hospital, such as University Medical Center, and a community hospital, such as North Arundel, coming together are obvious, Fiedler said. Such a merger "provides a teaching hospital with another base of patients, and provides the community hospital with access to expertise it might not have or be able to bring to patients otherwise," Fiedler said.

UMMS is North Arundel's fourth merger possibility in four years.

In 1996, North Arundel and Anne Arundel Medical Center called off merger talks.

In January 1998, North Arundel announced a merger with Mercy Medical Center, then called off the deal four months later.

In June 1998, New Children's Hospital signed a letter of intent to join North Arundel, but that deal was put on hold by North Arundel in December 1998.

After successfully merging with Maryland General Hospital last January, UMMS saw its talks with Bon Secours Baltimore Health System break down a month later.

When hospitals enter merger talks, it is very important to find a match between cultures and expectations, Fiedler said.

"You can liken a hospital merger to a marriage," she said. "You don't marry everyone you date."

UMMS includes the UM Medical Center and three community hospitals -- Maryland General, Deaton and Kernan. The system is licensed for 1,476 beds and has 5,500 employees. In 1999, UMMS had gross patient revenue of $721 million.

North Arundel Health System includes Mount Washington Pediatric Hospital, which manages the Hospital for Sick Children in Washington; Nighttime Pediatrics North in Pasadena; the Sunrise Assisted and Independent Living Center in Severna Park; and Special Beginnings Birth and Women's center in Arnold.

It has 2,600 employees, and in 1999 had $176 million in gross patient revenue.

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