A Tale of Two Hospitals
Date: February 1, 2013
You have probably heard that the University of Maryland Medical System recently acquired St. Joseph’s Hospital in Towson. It would be natural to ask why Johns Hopkins didn’t purchase the hospital when our strategy has been to build an integrated care delivery network in the Baltimore-Washington region, and especially since last year we acquired a hospital in seemingly far-off St. Petersburg, Fla. It is a legitimate question, and answering it gives me the opportunity to explain our philosophy.
We are not actively looking to acquire hospitals. Our goal has never been to have the largest hospital system in the region. However, the Baltimore-Washington area has become one large, interconnected health care market that continues to consolidate. We have to remain open to opportunities so we can stay competitive and supportive of our tripartite mission.
When we look at a hospital, we ask first and foremost whether that institution can contribute to our mission, particularly to education and research and furthering health care knowledge and delivery. Also, does that institution share our commitment to serving its community? In essence, is the hospital mission-minded?
Fortunately, the hospitals that have become part of Johns Hopkins Medicine are not only financially sound but are indeed mission-minded organizations. That brings me first to All Children’s Hospital, which was founded in 1926 as a center for crippled children. It since has become a free-standing children’s hospital with a highly regarded clinical operation. It developed a brand new 259-bed facility in 2010 that is absolutely state-of-the-art.
Our connection with All Children’s started about four years ago when Ron Werthman, our Health System’s chief financial officer, received a call from a professional friend who was then working at an executive level at All Children’s. They discussed exploring ways the two systems could develop an affiliation.
Later, the All Children’s board, in subsequent conversations with us, liked the idea of becoming integrated with our “academic engine.”
What was in it for us? For one, George Dover, head of the Johns Hopkins Children’s Center and director of pediatrics, recognized an opportunity to develop new residency and fellowship training programs and new research programs there. He also recognized the prospect for new employment opportunities for recent graduates of our own training programs. And perhaps most important of all, he recognized the opportunity to make a major difference in the care of children in that part of our country. So that fit neatly into our philosophy.
Out of these discussions, All Children’s became a member of Johns Hopkins Medicine in 2011. Early on, we had the good fortune of sending Jonathan Ellen, director of pediatrics at Johns Hopkins Bayview Medical Center, to All Children’s to serve as vice dean and physician-in-chief. Last August, he was named president of All Children’s.
Dr. Ellen has started developing a residency training program and recruited a director of research to create new research programs at the hospital. He has been well-received not only by the board and medical staff but also by employees and the community.
In the case of St. Joseph’s, we did look carefully at the opportunity but concluded that it presented too many unknown liabilities, including financial and reputational challenges. Our analysis showed us that for what we want to accomplish in the region, it was not necessary for us to take on those risks, particularly in light of the uncertainties associated with the financial problems of our federal government.
All Children’s Hospital is an opportunity that we would admit is a “one-off,” not consistent with our development of a regional integrated delivery system. However, we will continually evaluate the All Children’s-Hopkins arrangement to see if it could be replicated elsewhere for the right reasons.
Ronald R. Peterson
President, The Johns Hopkins Hospital and Health System
Executive Vice President, Johns Hopkins Medicine