The University of Maryland Medical System said yesterday that it will become the parent company of Maryland General Health Systems in an "affiliation" that would preserve the two hospital systems as separate entities, while reducing their operating costs.
No money will change hands, except for a contribution by UMMS for capital improvements at Maryland General, officials said at a news conference at Maryland General.
Each system will retain its name and board of directors, but they will pool some medical resources and develop a joint referral system.
James R. Wood, president and chief executive of Maryland General Health Systems, said the affiliation will be "transparent," meaning the merger will not be noticeable immediately.
Dr. Morton I. Rapoport, president and chief executive of University of Maryland Medical System, said the two systems agreed to an affiliation to "grow market share and deliver operations in a more efficient way."
Potential job losses have not yet been determined as the hospitals begin to weed out "redundancies" in their administrative, procurement and contracting operations, Rapoport said.
In the long-term, Wood said, he expects Maryland General will increase its current work force of 1,000.
Maryland hospitals have been merging rapidly over the past few years. The trend is particularly pronounced in mergers of hospitals affiliated with medical schools, such as UMMS, and community hospitals, such as Maryland General, which depend on doctors in private practice to admit patients.
Dr. Paul Griner, director of the Center for the Assessment and Management of Change in Academic Medicine, a division of the Association of American Medical Colleges in Washington, said the trend is good for the health care industry and patients.
"Around the country, medical centers are developing integrated networks to increase patient access to specialized services, while expanding the hospitals' referral base," Griner said.
"It's a trend that's been going on for about eight years in response to the decrease in regulation and increase in competitiveness," he said.
Rapoport said UMMS -- a nonprofit teaching hospital with 6,000 employees -- is interested in pursuing other affiliations.
Together, UMMS and Maryland General will have annual revenue of more than $650 million. Maryland General, at 827 Linden Ave., is at the northern end of the Howard Street corridor in downtown Baltimore. UMMS is further downtown at 22 South Greene St.
Besides its 747-bed University of Maryland Medical Center, UMMS owns Kernan Hospital, an orthopedic and rehabilitation facility, which it acquired in 1986, and Deaton Specialty Hospital and Home in West Baltimore, which it acquired in 1996.
Maryland General is a 300-bed hospital. It also owns four primary-care centers.
How they compare
The University of Maryland Medical System (UMMS) and the Maryland General Health System at a glance:
UMMS Md. Gen.
Revenue $549 million $114 million
Profit $4.7 million $500,000
Employees 6,000 1,300
Licensed beds 1,253 300
Uncompensated care 15.5% 7.3%
Note: Financial figures based on fiscal 1999 budget.
SOURCE: University of Maryland Medical System
Pub Date: 1/15/99