Johns Hopkins plans $469 million expansion and modernization of its Bayview Medical Center

March 02--Johns Hopkins Bayview Medical Center would get a modern hospital facility and renovations to two existing buildings in a $469 million plan to upgrade the Southeast Baltimore campus that serves both the local community and more far-flung patients seeking specialty care.

The long-planned overhaul would mean private patient rooms and state-of-the-art operating rooms, as well as other many other infrastructure upgrades, according to a plan presented by the hospital to state regulators.

Hospital officials say this would allow the hospital to better meet patient expectations, as well as increase privacy and safety. It's also in keeping with services offered at other hospitals in the region that have modernized with renovation and construction projects, including the $1.1 billion Johns Hopkins complex that opened in 2012.

"Getting our patients into private rooms, that's the fundamental thing," said Charles Reuland, Bayview's executive vice president and chief operating officer. "More than half the patients are in semi-private rooms and you can imagine it's a patient safety and infection control and privacy issue."

It's also an efficiency issue, he said. Sometimes doctors can't send a patient to a bed from the emergency room because the person on the other side of the curtain isn't the same gender or has an infection that could spread.

Beyond the beds, Reuland said, there are other elements of the campus that are outdated and hampering quality and efficient care.

Bayview has spent millions in recent years upgrading its emergency department and cancer treatment wing, but this project represents the largest portion of the project. It will include a new seven-story inpatient building, according to an application the hospital sent to state officials who must approve the investment.

The Maryland Health Care Commission has approved several such upgrades across the state in recent years, including Mercy Medical Center's new $400 million hospital in downtown Baltimore that opened in 2012. It will review Bayview's application in coming months, along with other state regulators who will look how the investment will affect hospital rates, which are set by a state commission in an effort to control health care costs.

In Bayview's case, the beds could be the largest factor influencing the approvals, said Paul Parker, director of the commission's Center for Health Care Facilities Planning & Development. About 60 percent of the beds at Bayview are in semi-private rooms, and most hospitals in the state already have taken steps to reduce or eliminate them.

Under its plan, Bayview would reduce its overall number of inpatient beds to 315 from 342, a move that reflects increasing efficiency and a reduction in the number of people who need to be admitted to hospitals across the state in recent years, said Kevin McDonald, chief of the commission's certificate of need program.

State data shows that the number of patients discharged from Bayview dropped to just under 19,000 in 2016 from more than 21,400 a decade earlier.

"They are really looking to bring their current facilities up to a more modern standard," McDonald said.

Bayview was once part of Baltimore's municipal hospital system but became part of the Johns Hopkins Health System in 1984, making it something of a hybrid in the state.

It operates as a community hospital, offering all the standard services needed in the area. But some specialties are also offered at Bayview, such as a 20-bed adult burn center, the only one in the state. The campus also offers extensive behavioral health services and a large geriatric program. Many of its physicians also have academic appointments in the Hopkins School of Medicine and residents of the medical school spend about 30 percent of their residencies at Bayview.

Zeke Cohen, who represents the area on the Baltimore City Council, said his wife recently finished her medical residency in psychiatry, which included a rotation at Bayview. He said she enjoyed working in the community-oriented atmosphere.

And Cohen said he was pleased to hear about a major upgrade that would benefit his constituents. He said he's been working with the campus to improve health outcomes for Hispanic neighbors.

"I'm happy to see them expanding and support their renovation," he said.

Hospital industry observers say upgrades are good for the community. And the state's system of regulating hospitals -- which includes regulating what they charge patients, as well as encouraging efficiency and promoting quality care -- is helping promote investment, said Dai Tinglong, an assistant professor of operations management and business analytics at Hopkins' Carey Business School.

"Conventional wisdom says that when you regulate prices, it will stifle investments and lead to low quality," he said. "The opposite is happening in Maryland: When hospitals have stable and predictable revenues and financial stability, they have every incentive to upgrade their facility and maintain high service standards."

Reuland acknowledged that Bayview will seek rate increases to help pay debt on the investment.

Joshua Nemzoff, president of Nemzoff & Co., a New Hope, Pa.-based consulting firm, called the $469 million price tag steep, though not out of line with what other hospitals have paid. Similar expansions are more of a financial gamble for hospitals in other states that are not part of a world-class hospital system and can't rely on rate increases to pay for capital costs.

There is also risk in not renovating, Nemzoff said. Patients and doctors both expect state-of-the-art services and private rooms. The upgrades may attract more customers and medical professionals to the campus.

"Building a new hospital for $469 million could put you in very serious trouble, but Bayview has Hopkins backing them and a rate system that allows them to raise rates and those two things make this financial viable," he said. "And as far as the reasons for doing it, they are good. Sounds like the hospital is kind of worn out."

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