Gov. Martin O’Malley and Prince George’s County leaders signed a partnership agreement Thursday, pledging to rescue the county’s long-struggling hospital system and to share the costs of building a new hospital.
O’Malley (D) and county officials said they will overhaul the three aging hospitals in Bowie, Cheverly and Laurel into a system capable of caring for residents without the need for regular government bailouts.
“This is not an announcement about just keeping the hospital open. … This is about the goal we all share: to transform this hospital so it is a place of choice for residents of Prince George’s County to go for health care,” said O’Malley, who called the latest partnership effort a “game changer.”
Under the deal, the state and county agree to have the University of Maryland Medical System study how to make the hospitals profitable over the next 18 months. By November, officials plan to ink an agreement on how both governments would pay for the overhaul and build a new regional medical center, which officials estimate would cost $600 million. Officials said they have not yet determined the site for the new hospital.
County and state officials were unable to say Thursday how they plan to pay for the effort; officials said the details would be settled in four to six months. Concerns of cost scuttled previous attempts to sell the system, which has lost money since the 1990s.
“We have flexibility if it works out according to plan,” said Thomas Himler, a longtime hospital system adviser and director of the county Office of Management and Budget, adding that the county and state have a tentative idea of how to pay for the costs but declined to provide details.
“The numbers will work out,” he said.
Sources familiar with the agreement said the county would borrow an undetermined amount of money to provide funds for the deal, paying it back at about $16 million per year, which is about $1 million more than it currently pays annually to keep the hospitals open. The state would fund the rest of the cost, but officials were unable to say how much it would be or how they would pay it.
“We’re not at phase two yet,” said O’Malley, referring to when the state would need to pay for improvements. “We’ll get to all of those things. What I do know is that we can’t afford to lose this system.”
As they shook hands before a room of hospital employees Thursday in Upper Marlboro, lawmakers said they are much more optimistic about this attempt to save the hospital system. Unlike earlier deals, the new effort includes the state medical school system and financial commitments from the county and state.
“We’ve been talking about this since Parris Glendening’s term,” said Del. James Hubbard (D-Dist. 23A) of Bowie, referring to the governor who served from 1994 to 2002. “We’ve never gotten to this point before.”
The $600 million estimate does not include roughly $160 million in debts owed by Dimensions Healthcare Systems, the nonprofit company that runs the county hospitals. Dimensions would work to raise money to pay off its pension obligations and other debts before the university system takeover, officials said.
Though the county has owned hospitals since the 1940s, the system has been a drain on government finances for years. More than 25 percent of the hospital system’s patients are uninsured, which has led the system to lose money since the mid-1990s.
Health experts and hospital officials say that the county failed over the years to invest properly in maintaining and upgrading the facilities to stay attractive to insured customers.
More than 180,000 patients are treated in the hospital system every year.
Officials believe that the involvement of the University of Maryland Medical System makes the biggest difference this time. As a teaching hospital, the medical system can field medical students to cover health needs without concerns of profitability, and provide clinical innovation, research and education.
“[UMMS] will add instant credibility to a system that has struggled to maintain itself,” said County Executive Rushern L. Baker III (D).
But officials have been optimistic before, only to see efforts fail.
O’Malley and county leaders promised similar results in March 2008, when they agreed to have an independent Hospital Authority evaluate the system and seek a private buyer. That effort failed after no company was willing to buy the system, despite agreements by both governments to give $174 million to anyone who would take it off their hands.
Robert Chrencik, president of the university medical system, said they were asked to study how to reform the hospitals after the last authority failed. The system hopes to submit plans for a new hospital by January 2013, he said.
O’Malley conceded that the state and county have been trying to stabilize the hospital for 15 years but said this time it will be different.
“Not just a promise, it’s a process,” he said. “We’re certainly not across goal line yet, but we do believe we have a plan to get across that goal line.”
Lt. Gov. Anthony Brown (D) asked for patience and faith.
“Don’t get fixated on a number that may be out there,” Brown said. “This is just a starting point. It’s a heavy lift. … There will be political hurdles, but we’re committed to overcoming those hurdles.”
dvalentine@gazette.net
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