Hopkins medicine goes global

June 13, 2006|By M. WILLIAM SALGANIK | M. WILLIAM SALGANIK,SUN REPORTER

With insurers demanding discounted rates in the 1990s, Johns Hopkins and other prestigious hospitals looked to bolster the bottom line by luring international patients.

Then came Sept. 11, 2001. Visitors, particularly from the Middle East, had more trouble getting visas to enter the United States, and the flow of international patients became more of a trickle.

Now, instead of bringing patients to Baltimore, Hopkins is going where the patients are.

In the past few months, representatives of Johns Hopkins Medicine International have been jetting to ribbon cuttings and announcing new deals. Just this year, gleaming new Hopkins-affiliated hospitals opened in Beirut, Lebanon, and Panama City, Panama. Hopkins announced a consulting deal for a hospital in Dublin, Ireland, due to open this summer. It began a "co-branded" Center for Safety, Quality and Management with a technical institute in Monterrey, Mexico.

And, as debate raged in the United States about whether a firm from the United Arab Emirates should manage operations at American ports, Hopkins inked its first management contract to run an overseas hospital, in the UAE state of Abu Dhabi.

It's the largest burst of activity since Hopkins launched its international division in 1998 with the opening of a micro-Hopkins in Singapore. Now those seeds are blossoming, giving Hopkins an edge as it raises its flag worldwide to enhance its brand and prestige and widen the net for revenue.

"We don't advertise, but through this use of our brand, we are marketing the Johns Hopkins Health System throughout the world," said Steve J. Thompson, chief executive officer of Johns Hopkins Medicine International.

While other big-name American hospitals and medical schools were later to the starting line, somewhere between a dozen and two dozen are seeking patients - and income - overseas.

Harvard advises on a "health care city" in Dubai, UAE, and the Mayo Clinic runs a cardiology center in Dubai as well. Cleveland Clinic owns a small piece of a hospital in Jiddah, Saudi Arabia. Cornell has a full-scale medical school in Doha, Qatar. The University of Pittsburgh Medical Center operates a transplant facility in Palermo, Italy, and is developing two cancer centers in Ireland.

Because most of these projects are in the early stages, evidence is still thin as to how closely they match the quality of the American institutions that are advising them. It's also unclear whether they can be a significant money generator for academic medical institutions in the United States.

"Reverse outsourcing" is what John Hutchins, who used to run programs for international patients at Hopkins and Cleveland Clinic, calls it. Rather than sending work that used to be done here overseas, American medical institutions are reaching into other countries to do work there.

U.S. hospitals and universities have always sent professors abroad to lecture or researchers to seek cures for tropical diseases. But the kinds of deals being pursued now target countries that need modern medical facilities and can pay for them.

"Traditional revenue sources for organizations like ours get squeezed," said Hopkins' Thompson, "and we are looking for new sources of revenue."

The roots of these international ventures reach to the 1990s, as managed care insurers began to dominate the market. The HMOs negotiated discounted fees, pushed many procedures that once meant a hospital stay to outpatient and reduced the length of hospital stays. Those changes reined in the patient revenue that had helped subsidize teaching and research.

Hospitals now generally get paid 39 percent of "sticker price" for insured patients, said Gerard F. Anderson, director of the Johns Hopkins Center for Hospital Finance and Management. Maryland is an exception; state regulations require everyone to pay the same. But hospitals here still felt the impact of shorter stays and the shift to outpatient, and academic hospitals feared HMOs would drive patients to lower-cost community hospitals.

Besides, Maryland's regulated prices don't extend to doctor bills. Although the data aren't as precise for hospitals, indications are doctors get paid at an even deeper discount, according to Anderson.

One place that high-prestige hospitals turned was to international patients, who still paid the full price and didn't need an HMO's permission for a hospital stay or a procedure. The American centers set up offices, such as those Hutchins ran at Hopkins and the Cleveland Clinic, to attract international patients and help them make arrangements for their travel, stay and care.

"I had the CFO of a major teaching hospital tell me international patients made up 5 percent of their patients and 50 percent of their profit," said Dr. Robert K. Crone, dean for international programs at Harvard Medical School and president and chief executive of Harvard Medical International.

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