D.C. officials approve Johns Hopkins-Sibley integration
Thursday, October 28, 2010; 4:13 PM
The District health department on Thursday approved the acquisition of Sibley Memorial Hospital by Baltimore-based Johns Hopkins Health System, giving the world-class academic medical center its first foothold in the District.
Driven by Sibley's need to ensure long-term financial stability by increasing its volume of patients, the move will allow Hopkins to improve its market position in the Washington-Baltimore region.
The integration is also part of a broader trend toward hospital consolidation, which promises to grow, experts say, because the health-care overhaul passed in March puts such emphasis on broad systems in which hospitals and doctors better coordinate care. In the Washington region, that trend is pitting Hopkins against the other big player, Columbia-based MedStar Health, which owns Washington Hospital Center and Georgetown University Hospital.
Under the long-expected arrangement, which Sibley's board approved Wednesday and which does not involve any exchange of money, the 328-bed hospital in Northwest Washington will keep its name, management and physician staff.
No Sibley assets will be diverted to Hopkins, officials said. Day-to-day operations are not expected to change, although Sibley is likely to gain comprehensive cancer facilities, a new women's health-care program, expanded geriatric services and greater access to clinical trials.
Sibley will become a subsidiary of Hopkins, one of the country's leading medical schools, with an extensive research faculty and sprawling hospital system. That system includes Howard County General Hospital in Columbia and Suburban Hospital in Bethesda, which Hopkins acquired last year.
Sibley will provide Hopkins with a "strategic advantage," according to documents provided by Hopkins and Sibley executives to the D.C. health department. In Maryland, hospital payment rates are set by the state; that is not the case in the District.
Or, as one analyst said: "Sibley can get more money for doing the same thing."
In addition, Sibley's proximity to a "large patient base of government employees and diplomatic personnel" make it a "premier location to build a larger international patient clientele," the officials said. Hopkins's vision is to provide a full range of services to "several thousand [international] patients" annually on the Sibley campus.
"Sibley is a highly regarded hospital and a wonderful community asset," Ron Peterson, president of the Johns Hopkins Health System, said in a written response to questions. Integrating with Hopkins combines Sibley's clinical expertise and Hopkins's academic-based research and teaching and clinical care, he said. "We fully expect that our relationship will continue to improve the brand image of Johns Hopkins Medicine."
Hopkins officials have said they have no plans to expand into Northern Virginia or rescue struggling institutions, such as United Medical Center in Southeast Washington or Dimensions Healthcare System in Prince George's County.
The integration was initiated by Sibley, which for at least a year has been talking to possible suitors about an affiliation because of dropping patient volumes. Industry experts say the consolidation reflects several factors.
"The economic pressures, pressures from health insurers and aspects of health-care reform, all continue to drive hospitals to consider alignments, and not only horizontal with other hospitals, but also alignments with other types of providers, including physicians," said Bob Atlas, executive vice president for Avalere Health, a health-care strategy and research firm.
Although some of the clinical care expansions at Sibley had been planned before the acquisition and building for some is underway, teaming with Hopkins allows possibilities that "might not otherwise be available," according to documents filed with the D.C. health department.
Those possibilities include a collaboration with the National Cancer Institute to establish a cancer program for "state of the art" cancer care and provide access to clinical trials. Sibley has a strong breast cancer center.
The options also include a plan to bring Sibley into the Hopkins clinical trials network, including collaborations with Suburban Hospital and the National Institutes of Health. Recruitment for clinical trials is a significant challenge for Hopkins, officials said. As the sophistication of medicine increases and therapies become more targeted, the need for trial participants increases greatly.
Hopkins will create a planning committee with executives from Sibley and Suburban to avoid duplication of services at its Washington area subsidiaries. The plan is to put more emphasis on cancer services at Sibley and cardiac services at Suburban.
Hopkins will also work toward having Sibley's resident physicians and practitioners serving as "first adopters" for cutting-edge technologies and treatments, according to what officials described in the documents.
Other possible expansions include a behavioral health and psychiatry center that builds on Sibley's existing programs. Sibley also plans to add to its obstetrics program and develop an orthopedics program that focuses on subspecialties such as orthopedic oncology, joint replacement or sports medicine.
In many ways, the expansion of services reflects the changing demographics of the area, notably the aging of baby boomers, many of whom are getting hip replacements, doctors said. Sibley operates an assisted living facility.
One of Sibley's biggest challenges has been the loss of patients because of changes in physician practices. Many primary care doctors have dropped participation with insurance, and some have moved to concierge practices, where patients pay a premium for personalized services.
Those changes mean fewer patients in doctors' offices, which translates into fewer patients at Sibley, the documents said.
To address the doctor shortage, Hopkins hopes to hire more primary care physicians, recruit cardiologists and gastroenterologists, and use "good faith efforts to cause" Hopkins-employed surgical and nonsurgical specialists to establish permanent practice locations in the region and apply for privileges at Sibley, according to the agreement.
Which hospital's doctors?
It's unclear, however, to what degree patients going to Sibley will be seen by a Hopkins doctor. Steve Thompson, executive vice president for Johns Hopkins Medicine, said that Hopkins doctors "will be recruited to augment the medical staff needs and grow programs" at Sibley. He did not elaborate. Other Hopkins-trained doctors practicing in Washington said they have their doubts.
"No Hopkins physicians are planning to come down to Sibley, not unless they are rewarded tremendously," said an internal medicine physician who completed her residency at Hopkins and did not want to be identified for fear of offending a potential employer. "It's going to be Sibley with Hopkins running it, as opposed to Sibley being Hopkins," the doctor said.
There are no plans to use Sibley as a teaching hospital, according to the documents.
The financial arrangements have been the subject of speculation because of Sibley's significant cash reserves. James Powers, president of Sibley's medical staff, wrote in the current Sibley staff newsletter that staff worried that "high-powered specialists from Baltimore will be inundating us with their presence, or that there will be a giant sucking noise created by patients being drained over to our sister city in Maryland."
Under the agreement, all of Sibley's assets will remain subject to exclusive control of Sibley's board. However, Hopkins will have the right to appoint the majority of the Sibley board members in six years.