Quoth MedStar Health: Nevermore. The Columbia, Md.-based healthcare system last week decided to shut down an antebellum Baltimore hospital that had cared for wounded Union soldiers and witnessed the last breath of poet Edgar Allan Poe.
The second-oldest facility in the Baltimore area, 167-bed Church Hospital couldn't survive an overbedded market, declining admissions and a Maryland regulatory agency's resistance to price increases.
But in a deal with the state's hospital rate-setting agency, the closure will help MedStar keep two other Baltimore hospitals going. MedStar comprises seven hospitals, the result of a 1998 merger of Baltimore-based Helix Health and Washington-based Medlantic Healthcare Group.
MedStar could add a hospital soon. It's in final discussions to acquire 359-bed Georgetown University Hospital in Washington, and a decision is expected in October, said MedStar spokesman John Marzano.
Church Hospital is the second vintage facility to close in Baltimore in two months. Bon Secours Health System in July shut 95-bed Liberty Medical Center (Aug. 9, p. 24).
Church was expected to lose $6 million on revenues of $46 million in fiscal 2000 ending June 30. It recorded losses of $3 million on $48 million in revenues in 1999 and $2.7 million on $47 million in revenues in 1998.
Despite the losses, the state's Health Services Cost Review Commission, which sets individual hospital rates, said Church's costs were too high and sought to penalize the facility with a rate decrease. The agency also was about to seek a rate decrease for another MedStar facility, 243-bed Franklin Square Hospital Center, Baltimore, for the same reasons, said commission Executive Director Robert Murray.
Meanwhile a third facility, 378-bed Union Memorial Hospital, was losing money but had lower-than-average costs, prompting MedStar officials to consider petitioning for a rate increase.
Instead of locking horns in three fights, the state commission said it would allow Union's rate increase if Franklin Square's rates were lowered and Church was closed, Murray said. The closure removes some capacity from the Baltimore hospital market, which has about twice the number of necessary beds, he said.
Acute-care services will be phased out by Nov. 30, and a retirement facility on the Church campus will close by next June, MedStar said.