Internal rift is testing Hopkins' will


Although they often act like sibling rivals these days, Johns Hopkins' two major medical leaders, Dr. James A. Block and Dr. Michael E. Johns, started off as best buddies.

Three years ago, Dr. Johns, the powerful dean of the Hopkins School of Medicine, urged Hopkins trustees to consider Dr. Block for the highly prestigious job of president and chief executive of the Johns Hopkins Hospital and Health System.

And when Dr. Block was named to the post, he went out of his way to acknowledge his new friend.

"The opportunity to work with the quality of people here, and with

Michael Johns in particular, was very difficult to turn down," said Dr. Block, who was leaving the presidency of University Hospitals of Cleveland.

Now these men are clashing in a battle that goes beyond personalities to the heart, soul and future of Hopkins.

Dr. Block is laboring to put the hospital and Hopkins' health system on a more secure financial footing. Dr. Johns is fighting to protect one of the nation's most important medical research institutions at a time when it feels most beleaguered.

And neither man, sources said, is convinced the other has the right vision for Hopkins.

Today, trustees of the board of the hospital and trustees of the board of the Johns Hopkins University are holding special meetings in an effort to end the conflict. Trustees are weighing a range of possible organizational reforms which may significantly alter the way in which Maryland's largest hospital is run.

"What we decide in the next 24 or 30 months may determine the fate of Hopkins," said Donald A. Henderson. He was dean of the Hopkins School of Public Health from 1977 to 1990, is concerned about Hopkins' future and is closely following developments there. "You'd damn well better have a team and not warring factions."

Although none of the trustees would comment publicly on what they are planning, they emphasized privately the need to have cooperative leadership between Drs. Block and Johns. Despite requests, neither Dr. Block nor Dr. Johns would comment for this article.

Whether the trustees agree on a major reorganization -- giving one leader clear authority over the hospital, health system and medical school, as Dr. Henderson and some other medical administrators have advocated for the past decade -- or settle for less ambitious steps remains to be seen. But the trustees' aim is to improve an institutional and personal relationship that is critical not only to the well-being of Hopkins but the city itself.

All agree that the hospital and university-based medical school must work together smoothly if Hopkins is to remain one of the finest academic medical centers.

"These two sides have to understand each other. Their fates are really intertwined," said Dr. David J. Ramsay, president of the University of Maryland at Baltimore, referring to medical schools and hospitals at all academic centers. "If the hospital fails, the medical school goes down. And vice versa. They can't survive without one another."

Yet some conflict is inevitable, medical administrators said.

"Almost all of a hospital's revenue comes from clinical activities, and its ability to generate clinical activities depends on its success in the marketplace," said Robert A. Chrencik, senior vice president of finance and systems at the University of Maryland Medical Center. Medical schools, which receive a lot of funds from tuition, grants and government contracts, "are not market-driven" in the same way, he said.

Insider vs. outsider

But the conflicts at Hopkins exceed the usual organizational tensions. Hopkins officials and others who are familiar with the problems point to these additional factors: differences in the backgrounds and ambitions of Drs. Block and Johns, marketplace pressures on hospitals and Dr. Block's ill-fated lawsuit against the Prudential Insurance Co. of America -- which made him many enemies within Hopkins.

"Johns came from inside the organization. He's got Hopkins blood from head to toe -- he's got the religion," one source said. Dr. Block, by contrast, is the outsider at Hopkins. "The first thing he did was trash the existing management. He took the culture and said, 'I'm not impressed,' " that source said.

This blunt appraisal, from someone who is not an ally of either man, aptly describes the different perceptions within Hopkins of its two medical leaders.

Dr. Johns, 53, epitomizes the academic side of medicine. A specialist in the treatment of neck and head tumors who has published more than 150 papers, journal chapters and books, he came to Hopkins 11 years ago from the University of Virginia. He was soon named associate dean and then, in 1990, dean -- one of the most distinguished jobs in U.S. medicine, giving him authority over 1,000 faculty physicians.

Dr. Block, 54, although trained as a pediatrician, has made his mark as an administrator and health industry expert rather than as a clinician or researcher. Before becoming president of University Hospitals of Cleveland in 1986, he directed the Rochester Area Hospitals Corp., which was formed to coordinate hospital planning and control costs.

Dr. Block arrived in Baltimore with what he thought was a mandate to bring a storied hospital into the rough-and-tumble 1990s marketplace. HMOs, demanding cheaper hospital rates and lower doctors' fees, don't want to pay the added costs of teaching and research, which also face the threat of diminished governmental funding.

"These are extremely difficult and challenging times in America, and health care is not immune from the stresses of a society facing very fundamental change," Dr. Block said upon taking the Hopkins job. "Dr. Johns and I are keenly aware that we have to re-evaluate what we're doing, adapt and lead."

Changing Hopkins would be a formidable undertaking for anyone, given the more than 100 years of traditions.

But Dr. Block stumbled badly early on when he initiated a suit against Prudential, which had bought a profitable HMO Hopkins had begun. The terms of the purchase forbade Hopkins from starting another HMO until after the year 2000 -- a barrier that horrified the new hospital president, who saw an HMO as an important part of his strategy.

Dr. Block believes Hopkins' long-term interests lie in building a vast health system encompassing suburban facilities, alliances

with community hospitals throughout the region and a network of community doctors who could generate revenue for the system by sending patients to Hopkins specialists and hospitals.

Yet many among the faculty worry that resources are being diverted from research, from making Hopkins' goal the hiring of top scientists and equipping their laboratories to make breakthrough discoveries. Some fear their own role, and incomes, will be diminished in a system reflecting the emphasis HMOs place on primary rather than specialty care.

Those concerns contributed to Hopkins' decision to sell the HMO. When Dr. Block sued to regain authority to start an HMO, he was seen as criticizing the establishment and in particular his respected predecessor, Dr. Robert M. Heyssel, who was hospital president for 20 years.

Worse for Dr. Block, the lawsuit ended in a public relations nightmare earlier this year: an embarrassing apology to the former Prudential and Hopkins official, Barbara Hill, who had run the HMO and had been accused in the suit of wrongdoing.

Sources inside and outside Hopkins say Drs. Block and Johns have clashed over changes sought by Dr. Block. Because the medical school is a nearly autonomous part of the Johns Hopkins University, their conflict also created tensions between Dr. Block and the university president, William C. Richardson, who recently resigned to become president of the Kellogg Foundation.

Dr. Block also seethed, according to people who know him, when Dr. Johns became Hopkins' principal spokesman in Washington during the Clinton administration's health-care reform planning in 1993-'94.

The conflict between Drs. Johns and Block -- and, more important, the conflict between their institutions -- deeply concerns leaders on the Hopkins boards of trustees. Although they represent different institutional interests, the trustees of the hospital and university formed a joint governance committee and have been meeting for four months to resolve the problem. They are expected today to release their recommendations.

Pressures on many fronts

There's a lot on the line for Hopkins Hospital and the medical school, which face enormous pressures on several financial fronts.

The most recent government tally showed that Hopkins conducted research costing about $725 million in 1992, more than any other university in the country. But the Republican-controlled Congress may deliver a double whammy to universities long reliant upon research dollars.

First, to help reduce federal deficits, Republican leaders have said they intend to cut the research budgets of the National Institutes of Health and the National Science Foundation. Second, several key congressional officials intend to cut the "indirect cost rate" which pays for additional expenses related to research projects. Under some proposals, Johns Hopkins would lose tens of millions of dollars a year.

In addition, the school will fall about $2 million to $4 million short of its projected revenue on total patient fees of approximately $155 million this year.

"It's significant, but it's probably more important as a warning sign," Eugene S. Sunshine, the university's senior vice president for administration, said of the shortfall. "You have to view this as though it is a trend."

Because of that, he said, the Hopkins medical system must take a many-tiered approach to cutting costs and attracting patients, in part through the networking championed by Dr. Block.

But such a corporate outlook violates the academic ethic in which generations of Hopkins doctors have been steeped.

In an essay in the new edition of Hopkins Medical News magazine, Dr. Johns cited a series of laurels earned by the medical school and expressed his frustration at the coinciding financial pressures he faces.

"Rather than applause, we hear the clickety-clack of adding machines," he wrote. "That is the climate of our times. Rather than talking about health care reform, we are talking health cost reform."

But it won't only be Dr. Johns' concerns and those of Dr. Block that the trustees consider when they meet today. In 1873, not long before he died, Johns Hopkins wrote a letter to his first hospital trustees, inextricably linking their efforts to those of the university and medical school.

"In all your arrangements in relation to this hospital," he said, "you will bear constantly in mind that it is my wish and purpose that the institution should ultimately form a part of the medical school of that university for which I have made ample provision by my will."

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