Johns Hopkins-Sibley deal set for approval
Thursday, October 28, 2010
The agreement for Baltimore-based Johns Hopkins Health System to acquire Sibley Memorial Hospital is likely to be approved by District officials as soon as Thursday, 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.