That long-term solution could require the state and county to commit millions to subsidize and improve the hospital for the new owner, though no figures will be settled until after bids are taken later this year.
Under the plan unveiled Thursday, Prince George’s County and the state would each pay $12 million in the next two fiscal years to keep the three-hospital system going, as an independent authority starts to take bids for a private owner to take over.
Dimensions Healthcare, a special nonprofit company the county set up to run the hospital in the 1980s, will continue to operate the facilities until the sale, leaving the new board to set up a deal for private ownership by the 2009 legislative session.
The county and governor would each appoint three members to the independent authority, while the county’s Senate delegation would nominate a seventh member. Unlike the arrangement for Dimensions, elected officials will not be allowed to serve on the authority board, O’Malley said.
The ultimate goal is to divest the county and state from an aging, struggling hospital system first built in the 1940s. In addition to two nursing homes, the current system includes Prince George’s Hospital Center in Cheverly, Bowie Health Center and Laurel Regional Hospital.
Though it treats about 180,000 patients a year, the hospital system has posted losses every year since 1997. About 25 percent of patients are uninsured, causing about $12 million in annual losses, hospital officials say.
The problems have been magnified by a lack of financial commitment by the county, which owns the system. Except for Bowie, the hospitals date back more than three decades and lack many state-of-the-art improvements found elsewhere. County officials have also come under fire for shortchanging the hospital’s pension system in the past, which still needs $72 million to be fully funded.
One of the most notable rifts between the county and Dimensions came last summer, when County Executive Jack B. Johnson (D) withheld $14 million in hospital funding until Dimensions replaced the chairman of its board.
The frequent squabbling over money has cost the hospital in standing and customers. According to hospital officials, just half of county residents currently use the Dimensions Hospital system for health care. The political and financial liabilities have kept private hospital companies from taking the system on as well.
Johnson praised the newest proposal, saying it would allow residents to ultimately have ‘‘a first-class hospital.”
‘‘Today, we have laid out a blueprint to ensure the service [residents] deserve,” he said.
The deal, which Johnson said was one of several options O’Malley made to him last week, came after two months of silence in which the executive’s own negotiations for a deal fell through and political pressure was mounting.
Since last fall, Johnson and county officials had been actively courting Ascension Health, a St. Louis-based Catholic hospital company, to take over with state and county help. Since the session started in January, officials had said repeatedly that the deal was just a week or two away.
But Ascensions officials were mainly interested in taking over the operation of the hospital, and would only tentatively commit to buying the system outright after five to six years of county investments, County Councilman Samuel H. Dean (D-Dist. 6) of Mitchellville said.
‘‘We need to have someone acquire the system and move on,” he told the county delegation Thursday.
Until now, negotiations had been done in secret. Weeks prior to the announcement, Johnson had insisted on briefing local lawmakers in closed sessions only.
Moving forward with a new owner will likely take much more money than the current $24 million, however. Johnson said Ascension officials estimated it would take $270 million just to settle past debts for the hospital system.
‘‘And that’s when you haven’t put in a penny for capital,” said Johnson, who said it could cost another $100 million to upgrade technology and another $100 million on top of that to build new modern facilities to lure back insured patients.
County and state officials will likely be expected to front some of those costs, depending on what interested buyers propose. But O’Malley said there will be a state commitment.
‘‘There will be a bridge of support that has not been there in the past,” said O’Malley, who said the process will be ‘‘open and transparent.”
Resident groups and hospital workers greeted the latest proposal with cautious optimism.
‘‘We are on the right track,” said Ebs Burnough, spokesman for SEIU, the union that represents about 1,700 of the hospital’s 2,300 employees.
Religious leaders in Prince George’s also spoke with reserved hope.
‘‘We’re just grateful that they’re talking,” said the Rev. Jonathan Weaver, a Bowie pastor who staged a rally at the Cheverly hospital with other clergy members to call for action. ‘‘For a long time, they weren’t even doing that.”
Leaders insisted that the government get out of the hospital business this time around. Observers have noted that many other government-owned hospital systems were turned over to private companies nearly 30 years ago.
‘‘I’m not sure the county or the state is to blame, but I know we should not be in a position of panicking over this now,” the Rev. Perry Smith III said.
Smith said the county also needs to be willing to spend more on the hospitals.
‘‘If this county can afford to do what it does for National Harbor, we’d do something here,” he said.
what the bill would do
A seven-member board would be created to hold an open, competitive bidding to find a new owner. The governor and the Prince George’s County government would each appoint three members, and the county’s Senate delegation would appoint one member.
The state and county must reach an agreement within 60 days on public funding, the percentage each would cover and a plan to handle existing debt.
The bidding would be completed in time for review before the 2009 legislative session.
The state and county would each provide $12 million in fiscal 2008 to keep the hospital open through the bidding and another $12 million each to support it during the transfer in fiscal 2010.
All land used for health care would be transferred to the new owner. Any land not used for health care would be under county control.
