North Arundel Health System has delayed indefinitely its pending merger with New Children's Hospital, prompting New Children's to voluntarily eliminate its inpatient beds -- which two state regulatory boards were preparing to force it to do.
New Children's advised the Maryland Health Resources Planning Commission and the Health Services Cost Review Commission in a letter dated Dec. 1 and obtained by The Sun yesterday, that North Arundel recently said it did not "intend to proceed with the merger immediately and the future prospects for a merger are uncertain."
Agnes P. Nicholas, spokeswoman for New Children's, yesterday referred merger-related calls to North Arundel Health System, and declined to comment on the hospital's inpatient services.
Kevin Murnane, spokesman for North Arundel Health System, declined to comment on the status of the merger yesterday.
New Children's announced in June that it had signed a letter of intent with North Arundel after searching for a larger partner to help stem its large losses and shrinking patient count.
Nicholas said last week that the North Arundel deal had been delayed, but it was "still a go."
According to the letter, the hospitals' merger plan had called for New Children's inpatient services to be closed within 90 days of the completion of the deal and its remaining health care services to be "reconfigured."
The letter said New Children's would continue with that deadline and close its inpatient services by March 1 and replace them with ambulatory surgery facilities and long-term care beds.
Yesterday, the Maryland Health Resources Planning Commission met to continue with delicensure proceedings started last week when the state's Health Services Cost Review Commission voted unanimously to schedule a hearing on whether the hospital should stop admitting patients.
Before a hearing date could be set, the Health Resources Planning Commission had to agree to a joint hearing. Yesterday, the commission voted unanimously to hold a public hearing on delicensure if New Children's does not meet its voluntary deadline, said Pamela Barclay, the group's acting executive director.
"The hospital voluntarily committed to come forward with a proposal to close the inpatient services," Barclay said. "That's what the commissions wanted to happen.
"We're meeting with representatives of Children's later this week to start working with them in terms of helping them meet the timetable and the commitments they made in the letter."
Robert Murray, executive director of the Health Services Cost Review Commission, said the merger would have been "fruitful in helping Children's move away from inpatient services, and we were supportive of that process."
New Children's is licensed for 76 beds, of which 10.7 percent were occupied on an average day during the past fiscal year, according to state reports.
Murray said his agency had been concerned about New Children's care costs -- about 20 percent above the state average -- and its continued losses of $2 million to $3 million a year, which were eating into the hospital's endowment.
North Arundel Health System, based at 329-bed North Arundel Hospital in Glen Burnie, includes Mount Washington Pediatric Hospital, which is near New Children's.
Founded 89 years ago to treat children with chronic diseases, New Children's turned its attention to orthopedic and rehabilitation patients -- including adults -- and developed a sports medicine specialty. The letter indicated that New Children's will continue to develop its 110-unit assisted-living complex for which the hospital recently broke ground.
Pub Date: 12/09/98