MedStar to acquire Southern Maryland Hospital Center

MedStar Health will acquire Southern Maryland Hospital Center in Prince George’s County by the end of the year and plans more than $100 million in improvements to the 35-year-old facility.

The hospital in Clinton was founded in 1977 to address shortages in specialty care for residents of Calvert, Charles, Prince George’s and St. Mary’s counties. It was managed by its founder, Francis P. Chiaramonte, a physician, until he passed the organization to his son Michael in 2007. According to MedStar, the 238-bed acute-care medical center has more than 17,000 inpatient admissions annually. It also handles 65,000 emergency room visits a year — an average of about 7.5 an hour. About 550 physicians and more than 1,200 staff work there.

With the growing need for quality medical and surgical care and a dated facility, Michael Chiaramonte said he and his family could no longer keep pace. Prince George’s has a high number of uninsured residents who rely on emergency rooms. Patients who require specialists often travel outside the county for care.

“This was really a family decision,” he said. “Let’s face it: Hospitals are not like your corner grocery store. They aren’t such easy assets to pass along.”

Chiaramonte began a search for a large, well-capitalized owner in February. He said he insisted that potential buyers have connections to a college or university medical program.

With the hospital industry in a period of intense competition, he received more than a dozen responses.

He did not disclose the price MedStar would pay but said the company had committed to more than $100 million in upgrades and expansion over the next five years that he said matched his family’s vision for the facility. The plans include new care centers for the hospital’s oncology and neuroscience programs; an additional 15 to 20 emergency room beds; a large outpatient pavilion; a renovated lobby; and improved parking.

Prince George’s residents suffer from some of the area’s highest rates of HIV, diabetes and heart disease. State officials have proposed opening a new 280-bed hospital by 2017.

Chiaramonte chose MedStar, which operates Georgetown University Hospital, over proposals affiliated with the University of Maryland and Duke University, in part because he said MedStar committed to improving and expanding services in Southern Maryland. He will become president of the hospital and a MedStar senior vice president.

“We’ll see if we can help people again without having to drive to these faraway centers,” he said.

For Columbia-based MedStar, Southern Maryland will be its 10th hospital and its seventh in Maryland. It is the largest health-care organization in the region, but competition between major hospital providers has tightened in recent years as the region experiences demographic growth and the industry implements new federal health-care legislation.

Holy Cross Hospital and Adventist HealthCare have battled over state approval for proposed hospitals in Germantown and Clarksburg, respectively. Inova, headquartered in Falls Church, is discussing a collaboration with Children’s National Medical Center.

Baltimore-based Johns Hopkins Health System made perhaps the biggest splash in recent years when it agreed to acquire Sibley Memorial Hospital in 2010. In April, the hospital announced that Hopkins executive Richard “Chip” Davis would be Sibley’s new president.

Staff writer Lena H. Sun contributed to this report.

Jonathan O'Connell has covered land use and development in the Washington area for more than five years.
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