Bel Air hospital in crunch

Harford medical center: High patronage, too low rates force new facility to cut jobs, trim budget.

May 10, 2001

THE UNEXPECTED popularity of Harford County's new hospital is causing the facility to lose money rapidly, as it seeks further rate hikes and cuts back on staff.

While hospitals aim to increase patient volume to efficiently manage costs, the overwhelming success of Upper Chesapeake Medical Center has necessitated adding expensive temporary staff.

The Bel Air hospital, which opened Oct. 29, also claims to be caught in a time warp, with labor and other health care costs skyrocketing since it got state approval to build five years ago.

State regulators just approved a 5.7 percent rate increase for the hospital, half of what it requested. Still facing a $16 million loss this year, the nonprofit hospital's operator cut the work force by 5 percent. But it is hiring more nurses and others, in a tight labor market, to reduce its high temporary-agency staffing costs.

Upper Chesapeake is the first new Baltimore-area hospital in a quarter-century. It was designed to serve growing Harford County and capture much of the lucrative obstetrics and pediatrics business that went outside the county.

To build business quickly, it turned to Walt Disney Corp. for advice. The hotel-like design incorporates a grand staircase, granite floors and fountain in the lobby, separate entrances for medical services, capacious rooms, three meditation gardens and an aromatherapy center.

But more patients have resulted in more losses. The state rate-setting commission may allow a further small increase, but insurance companies and consumers are insisting on greater operating efficiencies for the 120-bed hospital.

Other hospitals are warning of staff cutbacks as rate-increase approvals fall well short of cost inflation. Maintaining medical services while containing costs under rate regulation is ever more challenging for Maryland's hospitals.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.