Worried about the future of one of the nation's premier medical centers, Johns Hopkins trustees yesterday initiated a major shake-up to unify both a splintered bureaucracy and the warring leaders of the independent hospital and medical school.
Although stopping short of a merger, the trustees established for NTC the first time a single authority for the two institutions. Significantly, the agreement allows Hopkins leaders to move money freely between the hospital and the medical school.
"We can't continue to do business as we have," declared Dr. Daniel Nathans, acting president of the Johns Hopkins University. "The old way of making independent decisions . . . just won't work anymore."
"We've gotten spoiled by a period of very rapid growth in both clinical income and primarily federal research funds," Dr. Nathans said. "We're at a new era."
Health maintenance organizations are cutting into the revenues of academic medical centers by diverting patients to less expensive community hospitals, threatening key funding for research and education. At the same time, federal officials are predicting significant cuts in medical research funding.
To face these challenges squarely, the trustees of the boards of the separate Johns Hopkins University and Johns Hopkins Hospital and Health System created a new governing organization closely tying together the hospital and the School of Medicine, which is part of the university.
"We want to think as one, though they are separate corporations" and will legally remain separate, said George L. Bunting Jr., chairman of the board of the hospital and health system.
I think the structural changes will streamline decision-making, and as a result you'll have more cooperation and communication," Mr. Bunting said. He and Morris W. Offit, chairman of the university trustees, led the effort to restructure Hopkins.
To drive home the point and "send a cultural message" to the institutions, the trustees are requiring that the hospital president, Dr. James A. Block, and the medical school dean, Dr. Michael E. Johns, share an office and support staff.
Feud is problem
The two men have been feuding, hindering their ability to reach agreement on major issues affecting the financial health and future of the two institutions.
The new organization enhances the influence of the university president in medical affairs and diminishes the autonomy of the medical school dean and the hospital president.
Yesterday's decision follows four months of work by a joint committee of hospital and university trustees formed to examine their institutions' administrative structure.
The new governing structure appears to add a bureaucratic layer but also, for the first time, consolidates authority in a single place. An Office of Johns Hopkins Medicine, with its own board of trustees, will govern joint activities of Hopkins' medical operations, including budgeting, strategic planning and personnel.
"We'd like to be able to move money around" between the institutions, Mr. Bunting said, to assure that fundamental missions like research and medical education are adequately supported.
The university president will be the panel's chairman. Other members include the president of the hospital; the dean of the medical school; the hospital and health system's executive vice president; the chief executive of a company called Johns Hopkins HealthCare; the chairmen of three departments at the medical school, who also serve as directors of clinical units at the hospital, and the chairman of one basic research department at the medical school.
"If it ever comes to the position for the need of conflict resolution, the [university] president can serve in that role," Mr. Offit said.
Overseeing the office will be a new board composed of five hospital trustees and five university trustees. The university president will serve as a nonvoting member; all board actions will require six votes for approval.
The hospital and medical school have always been closely intertwined -- the school's faculty members are the hospital's doctors, and the hospital's wards serve as the school's classrooms.
But the two institutions have not always headed in the same direction. With only brief exceptions over their more than century-long history, the hospital and the medical school have been led by separate chiefs and overseen by separate boards of trustees.
Last year, in an effort to quell some of the tension from the philosophical and personal clashes of Dr. Block and Dr. Johns, the two Hopkins boards set up Johns Hopkins Medicine as an informal group. But it didn't work out, trustees said yesterday.
"I think that the informal structure was not enough governing substance to pull it together, operating as one," Mr. Bunting said.
Tellingly, the six-page report approved yesterday by the two trustee boards repeatedly calls for the integration of staff throughout Hopkins' medical units and stressed the need for cooperation throughout.
"The members of the office will function in a collegial fashion to promote fulfillment of the vision for Johns Hopkins Medicine," the report reads. "The president [of Johns Hopkins Hospital] and the vice president of medicine and dean of the medical faculty [at the university] will co-locate their offices at a site to be determined and, where feasible, share support staff functions to ensure close communications on a day-to-day basis."
University officials downplayed the notion that the moves were linked to the conflict between Dr. Block and Dr. Johns.
"The tensions aren't anywhere near as heightened as people may believe," Mr. Offit said.
"It's not about personality issues at all," Dr. Nathans said. "We think it's primarily a structural problem, and we need to change the structure in order to integrate two institutions and two separate corporations." A joint written statement supporting the trustees' actions was issued in the names of Dr. Nathans, Dr. Block and Dr. Johns, but the hospital president and the medical dean were not available for comment yesterday.
Dr. Johns had previously supported the idea of creating a chancellor over all medical affairs -- a change backed by some former administrators -- and hinted that he was the right man for the job, sources said.
Trustees said creating a chancellorship was not the Hopkins way.
"A chancellor would not relate to the culture of Johns Hopkins Medicine," Mr. Offit said. "We've always had a strong sense of collegiality here. We do not need to bring in anyone from the outside or from the inside" as chancellor.
"I think we are looking upon this as an evolutionary process," Dr. Nathans said. "We may not get it quite right the first time."