May 21, 2010

Authority: No buyer for Prince George’s hospitals, manager can take over

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By Erich Wagner
Erich@MarylandReporter.com

A committee charged with finding a buyer for the financially troubled Prince George’s County hospital system announced there were no suitable buyers interested in the whole system.

The Prince George’s County Hospital Authority recommended that the system’s ownership be transferred to Dimensions Health Care, the current operator of the county’s three hospitals. The shift would be temporary, until an unnamed “strategic partner” can take over.

Kenneth Glover, chairman of the authority, cited “extreme turmoil” in the financial and credit markets at the time of bidding as a partial factor in the authority’s inability to find an appropriate buyer interested in the entire hospital system. The system now relies on $12 million from the state and $9 million from the county each year.

“Many of the players that would usually be interested said they couldn’t do it,” Glover said. He added selling portions of the system separately would be the equivalent of a “garage sale of assets,” and would not improve the quality of health care in Prince George’s County.

Although there were no suitable buyers, the authority recommended that the state and county continue negotiations with three bidders in the future: Anne Arundel Medical Center, the Chiaramonde Group, and Dimensions.

Dimensions has reportedly gotten an investment team from India to fund the purchase of the hospital system, offering the county $250 million for the sale and reinvestment in the system. Authority members did not address the report, published by The Gazette on Friday.

One member of the authority took issue with the recommendation to transfer ownership, even on a temporary basis, to Dimensions. Stan Brown opposed the approval of the authority’s final report, arguing that the recommendation of three “inadequate” bidders “would be inappropriate,” and criticized the concept of transferring ownership to Dimensions, even on a temporary basis.

“How can we transfer ownership to a bidder who was not responsive?” Brown asked. “Dimensions has for the past 15 years had a string of bad luck at best or incompetence. It’s not prudent or responsible to recommend the transfer of assets to Dimensions for any period of time, and then to a partner that is unnamed.”

Glover said Brown’s comments would be noted in the report.

“The document speaks to both of those issues, but we’ll include his concerns in the report,” he said. “We never intended to have a unanimous consensus. We needed to put together a plan for improving health care in Prince George’s County.”