Ending a lengthy search for a strategic partner that involved more than a dozen prospective candidates, Howard Health Systems announced on March 18 that it had selected Johns Hopkins Medicine.
According to Edward D. Miller, chief executive officer of Johns Hopkins Medicine and dean of the School of Medicine, the arrangement will bring Howard County General Hospital in as a full member of the Johns Hopkins Medicine family "while respecting the premise that residents of Howard County should influence decisions affecting their health services."
The closing on the transaction between the two not-for-profit health organizations is anticipated in three to six months, after notifying appropriate state and federal regulatory agencies. At the time of the closing, it is expected that the name of Howard County General Hospital will change to include identification as a Hopkins-affiliated facility.
The Johns Hopkins Hospital first worked with what would become Howard County General 25 years ago, when Connecticut General Life Insurance Company and Hopkins co-founded Columbia Hospital and Clinics Foundation. It was reorganized a year later as Howard County General Hospital, a private, not-for-profit community hospital.
"We are very excited about this homecoming," said Miller. "This partnership combines superior academic medicine with a strong, community-focused, integrated delivery system, which will benefit patients, communities, employees, physicians and medicine itself."
In a letter sent several months ago to friends of HCGH, Victor A. Broccolino, the hospital's president and chief executive officer, explained the decision to look for a strategic partner.
"The trustees have taken this initiative under their mandate," he said, "to enhance our institution's high quality of care, services and facilities; develop new services and facilities; support the efforts of the hospital's dedicated physicians and employees; and prepare for a future which will require additional and different health services."
Hopkins, which emerged as the unanimous choice of the hospital's board of trustees, has agreed to assume HCGH's debt of $57 million; fund the balance of HCGH's $25 million, five-year strategic plan; fund HCGH's $20 million, five-year capital replacement plan; and fund approximately $40 million for the board to establish a new community-based foundation to enhance the health and wellness of Howard Countians.
"A special financing opportunity associated with the acquisition of an unrelated organization made it possible for Hopkins to commit these funds without taking resources away from our current operations or community," said Ronald R. Peterson, president of The Johns Hopkins Health System and The Johns Hopkins Hospital.
While Hopkins must guarantee the debt service on this financing, it expects revenue from operations of HCGH to cover this obligation.
In addition, Johns Hopkins Medicine has agreed that Howard County residents will make up at least two-thirds of Howard County General Hospital's board of trustees. The agreement between the two partners also provides that representatives of the Columbia-based hospital will be appointed to the boards of Johns Hopkins Medicine and certain of its affiliates.
During dozens of meetings with community representatives since October 1997, local control of the hospital emerged as the No. 1 priority, according to Alton J. Scavo, chairman of the Howard County General Hospital board of trustees.
"We were never looking for the 'high bidder,'" Scavo pointed out. "We wanted to find a partner with a commitment to quality care who also believed Howard County residents should have influence over decisions affecting health services offered in Howard County."
The agreement with Johns Hopkins Medicine provides that certain important matters require the participation of the HCGH board, including the formulation of policies regarding quality of care, selection of local management, scope of services offered and formulation of capital and operating budgets.
The HCGH board of trustees chose Hopkins from a pre-selected group of prospective partners, citing such anticipated benefits of the union as continued improvement of clinical quality of care, increased managed care contracting opportunities, enhanced collaboration with community physicians and expansion of services and market area.
"Hopkins is not just the best of the outstanding choices we had available," Scavo said. "It is the right partner for us, further enabling us to achieve our mission. Hopkins provides future opportunities beyond the dreams of a community hospital operating on its own. It is incredibly exciting for us to have made such a match."
"The joining of Johns Hopkins Medicine and the Howard Health System will strengthen local control of our region's most important health resources," said George L. Bunting Jr., chairman of the boards of Johns Hopkins Medicine, The Johns Hopkins Hospital and The Johns Hopkins Health System. "Our missions, which reflect traditions of care and community commitment, will be advanced into the new century."
Howard Health System, which provides coordinated health care services to residents of Howard County and surrounding communities at numerous facilities, is How-ard County General Hospital's umbrella organization.
Since its founding 25 years ago, Howard County General Hospital, the system's flagship, has grown into a 233-bed, comprehensive, acute-care medical center that provides a broad range of services, including wo-men's and children's services, surgery, cardiology, oncology, gerontology, psychiatry, emergency services and community health education. It is the county's fifth largest employer, with nearly 1,200 full- and part-time employees. The 600-member medical staff represents 34 specialties and subspecialties. (Johns Hopkins has 2,600 employees at the Applied Physics Laboratory in Howard County.)
Hopkins does not anticipate any changes in employment conditions that would adversely affect the current employees as a result of the partnership.
In April, Howard County General Hospital will open a new family-centered Maternal-Child Unit, as well as the Claudia Mayer Cancer Resource and Image Center, Howard County's first resource center for cancer patients.
Johns Hopkins Medicine and Howard County General Hospital are already partners in the Central Maryland Heart Center, a joint venture that provides outpatient cardiac catheterization in Howard Health System's Ambulatory Care Center, adjacent to the hospital.
"We are very pleased to be embarking on a new relationship with an old friend," said Victor A. Broccolino, Howard County General Hospital president and chief executive officer. "The partnership with Johns Hopkins Medicine allows us to enhance and expand our existing commitment to improving the health of Howard Countians."
Broccolino, who has been with HCGH since 1990, will remain in his current role at HCGH under the new relationship.
Hopkins' Miller says that he considers this "win-win relationship" as "a significant step" in Johns Hopkins Medicine's strategic vision as well.
"HCGH's location, excellent reputation and outstanding medical staff are essential to the development of our regional integrated delivery system," Miller said. "The partnership will make both Hopkins and Howard County's hospitals and physicians more attractive to managed care decision-makers and will allow us to gain overall business by providing more services to more people. In addition, we should become more cost-competitive, achieving economies of scale by spreading our costs over a broader base.
"At the same time," he continued, "each and every aspect of this venture is designed to support the advancement of medical knowledge and to accelerate its accessibility to the communities we serve.
"While our merger with How-ard County General Hospital is an integral part of our broad vision to establish a true regional integrated delivery system, it in no way detracts from our traditional and continuing commitment to serve the health and social needs of our neighbors in East Baltimore," Miller emphasized. "Our numerous initiatives and programs to help improve the physical and economic health of the citizens of East Baltimore will be strengthened, not weakened, by this merger."
In addition to Howard Coun-ty General Hospital, the How-ard Health System encompasses Howard County General Hospital Wellness Center; Howard County Health Services, Rave Reviews Consignment Shop, Howard County Health Network, Central Maryland Oncology Center, Central Maryland Rehabilitation Center, Ambulatory Care Center, the Center for Ambulatory Surgery, Central Maryland Heart Center, Howard Home Health, Howard County General Hospital Wellness Center at Inwood Village Center and Claudia Mayer Cancer Resource and Image Center.