“You do fall in love with institutions the
way you fall in love with a life’s companion. It’s hard
to say what there was about this institution that appealed to me right
from the beginning. It wasn’t the appearance. Now the place looks
like something you wouldn’t be ashamed to be seen with in public.”
Dream of a Deal
By Anne Bennett Swingle
and Neil A Grauer
Almost exactly 20 years ago, Johns Hopkins acquired the ailing Baltimore City Hospitals. Today, that municipal hospital has been transformed into a thriving, multifaceted institution, one we know now as Johns Hopkins Bayview Medical Center.
No one would dispute the fact that two decades ago, Baltimore City Hospitals was a run-down, money-losing institution. But as one of the oldest, continuously operating health care facilities on the East Coast, it also had a whole lot going for it. Tough and tenacious, it had reinvented itself time and time again in order to remain useful and relevant. Few knew how much City Hospitals had to offer. Wary that acquiring it would prove a financial quagmire, Johns Hopkins drove a particularly hard bargain. It turned out to be a dream of a deal, and today, the acquisition is considered the most successful conversion of a municipal hospital anywhere in the country.
The link with Johns Hopkins was forged in the mid-1880s, even before its hospital opened, when William Welch, University pathologist, began studying Bay View Asylum patients in his research. Later, medical students from Hopkins joined University of Maryland students doing clinical rotations there.
Baltimore City Hospitals
In 1925 Bay View Asylum was renamed Baltimore City Hospitals—plural because it encompassed three separate hospitals: one for acute care, another for chronic care, and a third for tuberculosis patients. Psychiatric patients continued on at City Hospitals up through the 1930s when they were admitted to state institutions.
In the 1950s, City Hospitals was bursting at the seams with patients. Beds in its long, open wards were spaced about 10 feet apart and separated by curtains. It was now a teaching venue exclusively for Hopkins medical students, as Maryland had pulled out of its City Hospitals arrangement. Programs Bayview would become famous for, such as gerontology under Nathan Shock and later Mason Lord, were thriving. The National Institute on Aging’s Gerontology Research Center opened in 1968, the same year that community support from the Kiwanis’ Club established the now renowned Baltimore Regional Burn Center.
A bright light was Chesapeake Physicians, one of the first faculty practice plans in the country. When it was established in 1972, revenue for physicians and medical staff began flowing in.And yet, by 1980, Baltimore Mayor William Donald Schaefer was exploring bids from for-profit health care companies to take over City Hospitals, which was losing millions annually. Meanwhile, Chester Schmidt, president of Chesapeake Physicians, and Philip Zieve, chief of medicine, were lobbying The Johns Hopkins Hospital to acquire their besieged, but still promising, institution.
Such a DealIn 1982, under a contract with the city, Hopkins assumed management of City Hospitals and sent a trio of young hospital administrators out to run it. Ronald Peterson, William Ward and Kenneth Grabill dramatically reduced City Hospital’s multimillion-dollar deficits. In 1983, University and Hospital trustees voted unanimously to start negotiations to take over City Hospitals.
In the end, Hopkins never put a dime of its own into the deal. (It was able to cover its portion of the upgrade expenses with revenue generated at City Hospitals.) Negotiations were concluded in March 1984; the transfer of ownership was effective July 1. City Hospitals was renamed the Francis Scott Key Medical Center, with Peterson its president. Soon thereafter, he added Judy Reitz to the management team.
In the 20 years since the takeover, admissions, surgical procedures and clinic visits have risen consistently. Approximately 2,000 employees have been added to the payroll. Buildings and grounds have been transformed. The campus now is modern and vibrant. Most significantly, considering Hopkins’ worries as it hammered out the City Hospitals deal, Bayview has been in the black.