Monthly Archives: December 2017

‘Mr. Hopkins’ Departing After 44 Years

By Barry Rascovar

Dec. 18, 2017 — Ron Peterson isn’t your stereotypical leader of a renowned $8 billion enterprise. He’s quiet, reserved, extraordinarily polite and lacking in ego.

Yet time after time he has worked miracles at Johns Hopkins in his 44-year career at the East Baltimore academic medical center, the last 21 running its huge health-care system as well as the famed “mother ship” — Johns Hopkins Hospital.

More than any individual, Peterson has come to embody the spirit and commitment to superior health care envisioned by the founder.

Hopkins Medicine is Maryland’s crown jewel, the most prestigious and best-known enterprise in the state with a world-wide reputation as best in class.

It also is a giant economic engine for the state, encompassing six hospitals, 40 outpatient care sites, home care, managed care insurance, extensive medical activities abroad and a staff of over 40,000.

The place is a booming success because of Peterson’s steadying hand. Had he not been at the helm in 1996, Hopkins Medicine may have imploded.

Hopkins stood on the brink of tearing itself apart. A bitter, angry war had erupted between the hospital system’s assertive CEO and its prized medical staff.

Flash back to those tumultuous times when the managed-care revolution threatened the survival of hospital systems, especially high-cost academic medical centers that specialized in taking on the most difficult — and thus the most expensive — cases.

Block vs. Johns

Dr. James Block, a hard-charging CEO, had been brought in to meet the managed-care challenge, trying to bulldoze through deep budget cuts while extending the Hopkins universe to community hospitals and clinics. Both moves provoked the ire of the Hopkins medical faculty, represented by the highly regarded dean of the medical school, Dr. Michael M.E. Johns.

Open warfare erupted between the hospital CEO and the medical school’s leader.

At that pivotal moment, Block brought in Ron Peterson to act as a stabilizing force.

And why not? He had engineered a remarkable turnaround at the money-losing City Hospitals that today is known as Johns Hopkins Bayview and is ranked high for its expansive research and quality patient care.

Earlier in his career, Peterson had crafted a cost-reduction plan that by 1977 had Hopkins Hospital in the  black for the first time in 88 years.

The Block-Johns rift, though, proved impossible to bridge even for a unifier like Peterson.

Johns left in disgust, taking over Emory University’s medical school and hospital (where he dramatically increased the quality of care and research as he became president and CEO of Emory Health in Atlanta).

Then the Hopkins trustees forced Block out.

To no one’s surprise, Peterson was asked to replace Block, but this time in a revised management structure that made it clear the dean of the medical school, not the health system president, would have the final say.

That turned out not to be a problem.

The new dean, anesthesiologist Dr. Edward Miller, impressed the trustees and medical staff so much as interim leader he was named the first Dean/CEO of a novel umbrella entity, Johns Hopkins Medicine.

The Miller-Peterson Era

Miller and Peterson hit it off right away. A bond of trust developed between the two team players, whose modus operandi was consensus-seeking.

Well-liked and respected by colleagues, Miller was a good listener, accessible, decisive and delegated responsibility easily. He believed in the Hopkins culture of collegiality and collaboration. It helped that he looked the part of a presiding officer.

'Mr. Hopkins' Departing After 44 Years

Ron Peterson standing beside Hopkins Medicine’s Dean/CEO Ed Miller

His skills meshed with Peterson’s, who is obsessively detail-oriented, a financial whiz and sensitive to others’ feelings. Miller took care of the medical side and Peterson handled the administrative side of 21st-century health care. They never took major action without talking it over. No bitter rivalries or hard feelings.

They worked in tandem from their new office suites down the hall from one another.

Within a few years, the Hopkins civil war was history, the managed-care threat had eased and Hopkins Medicine enjoyed over a decade of rapid advances in patient care, teaching and innovations on the medical side and a big expansion of medical services, a community-based delivery model and billions of dollars in patient-care and research towers rising in East Baltimore.

Miller retired in 2012 but Peterson stayed on to tutor the new dean, Dr. Paul Rothman, and make sure the Hopkins ship of state was in tip-top shape for his own retirement.

He found an ideal successor to run the mother ship, Dr. Redonda Miller, whose specialty is medical education management and women’s health.

'Mr. Hopkins' Departing After 44 Years

Dr. Paul Rothman, Ron Peterson and Dr. Redonda Miller of Hopkins Medicine

Then last week, the trustees named Kevin Sowers, a longtime executive at Duke University’s medical system as the next chief of Hopkins’ extensive medical enterprise, but still No. 2 within the chain of command.

When Sowers takes over Feb. 1, Hopkins Medicine won’t have Peterson around for the first time in decades.

Unanswered Questions

Indeed, Peterson has been a Hopkins “lifer,” starting as an undergraduate on the Homewood campus (with the unfulfilled goal of becoming a physician) and ending his career nearly a half-century later as “Mr. Hopkins.”

He will leave behind plenty of unanswered questions:

  • Will Sowers and the current medical school dean develop the same compatibility as the Miller-Peterson team?
  • Or will Sowers, a Duke “lifer” until now, bring a totally different health management style to Hopkins that reignites the old conflict?
  • Will the medical staff welcome an outsider (much as they did for Rothman)?
  • Or will tensions arise with a health system CEO unimpressed by Hopkins’ engrained culture of collaboration and consultation?

Much is riding on the outcome of this transition.

The initial signs are promising: It was Rothman who suggested Sowers would be a good fit for the job.

'Mr. Hopkins' Departing After 44 Years

Kevin Sowers, the next Johns Hopkins Health System president

Sowers’ background as an oncology nurse (with an R.N. and a masters in nursing), his focus on improved patient safety and bedside care as a Duke administrator, and his teaching and research resume seem ideal for his new role.

Still, these are perilous times for academic medical centers. Under the Trump administration, federal funding for health care — especially Medicare and Medicaid — could be sharply curtailed, in part to pay for the Republican tax cut plan.

Meanwhile, Maryland is trying to convince the administration in Washington to approve an extension of the state’s unique all-payer hospital cost services system, one that places more pressure on hospitals to improve patient outcomes at lower cost.

Peterson has been in the middle of that fight, too.

So while he might be stepping down from his Hopkins duties (though remaining as a special adviser to Rothman), Peterson continues to have an impact in trying to save Maryland’s one-of-a-kind hospital payment system — a huge success story that could become a national model some day.

We may not have heard the last of Ron Peterson when it comes to crafting solutions to health-care problems. That would be very good news, indeed.

###

What’s an URDL?

By Barry Rascovar

Dec. 10, 2017 — It’s been exactly 50 years since planners in Baltimore County came up with one of the weirdest-sounding bureaucratic acronyms — URDL — that in time has become a national model for sensible growth management. So what’s an URDL?

The Urban-Rural Demarcation Line (pronounced hurdle, but with the “h” silent) was a response to the phenomenal population boom suburban counties experienced after G.I.’s came home from World War II.

In the 1950s, Baltimore County experienced an 82 percent surge in residents. In just one decade, 220,000 people decided to call Baltimore County home. This set off a massive construction wave of housing and retail developments.

This, in turn, put enormous pressure on county government to build an unheard-of number of new schools, extend water and sewer lines and dramatically increase government services to new residents.

Particularly troubling was the helter-skelter nature of this post-war suburban boom, much of it posing a threat to the rural character of the county and an even greater threat to the financial health of county government.

Novel Notion

URDL was created by the Baltimore County Planning Board in 1967 with the then-novel idea that the county should focus population growth in a handful of prime areas inside the URDL while land beyond the demarcation line retains its rural qualities.

Today, URDL is the crown jewel of Baltimore County, having been recognized by the American Planning Council as the “gold standard” for preserving rolling hills and valleys while at the same time concentrating residential and retail growth in compact areas where services can be delivered efficiently and cost-effectively.

What's an URDL?

Baltimore County’s URDL–Urban-Rural Demarcation Line (in red).

Other jurisdictions in Maryland facing similar urban-rural conflicts have followed the lead of Baltimore County. And why not? It’s about as smart a “smart growth” plan as anything you can think of.

Baltimore County Executive Kevin Kamenetz said at a ceremony last week honoring URDL’s golden anniversary that in his near-quarter century as an elected official nothing else has come close to matching the significance of the adoption of this demarcation line.

It was a “prescient move,” he noted, probably the most important step taken by county leaders. No doubt Kamenetz, who is running for governor, will repeatedly remind voters in next year’s campaign about his championing and embrace of the URDL.

For five decades elected officials in the county have resisted developer pressure to shrink the rural portion of the URDL. Thank goodness for that.

Today, Baltimore County devotes two-thirds of its land — 258,000 acres — to rural and environmentally protected uses. The county’s 831,000 residents live on the remaining 130,000 acres, with designated centers such as Owings Mills, Towson and White Marsh targeted as sites for future growth.

What this means is that many county residents can hop in a car and within a matter of minutes find themselves surrounded not by suburban retail mania and clustered housing but in pristine, green countryside.

Proximity of the URDL

Try it. Drive to the Hunt Valley Towne Centre with its shops, Wegmans and dining. To the east lies the busy York Road shopping corridor.  To the south lies the large McCormick Business Park, but to the north and west lie scenic rolling hills and lots and lots of horse farms.

Indeed, the only direct route from Reisterstown to Hunt Valley takes you through one of the most wondrous byways imaginable — horse country with virtually nothing to mar the view as far as the eye can see.

It’s a tribute to the county’s leadership that such a large, suburbanized jurisdiction — part of metropolis of 2.7 million — still holds on with determination to its rural character.

Preservation of rural land keeps agriculture thriving, protects the county’s watershed, maintains the environmental purity of forests and green spaces and gives residents an enhanced quality of life.

Other Maryland counties faced with the same problems have done likewise — neighboring Harford and Carroll counties, for instance, as well as Montgomery County. All of them have taken steps to keep growth tightly focused and to preserve as much as possible of their rural heritage.

Too often, we only hear about problems and woes of local governments. Once in a while, it’s nice to be reminded of good news.

So happy 50th anniversary, URDL.

May this planning mandate continue to provide officials around the nation with a sound and sensible way to promote economic growth and vitality while also preserving the integrity of our irreplaceable countryside.

###

Taxing Time for Maryland

By Barry Rascovar

Dec. 3, 2017 — Now that a massive trillion-dollar tax cut is a virtual certainty in Washington,  Maryland officials must quickly figure out if the appropriate reaction is panic or relief.

The impact on budget-makers in Annapolis and in the counties is enormous. Since Maryland’s tax laws are coupled to rules for the federal income-tax collections, what happens on Capital Hill tax-wise reverberates almost immediately in Maryland.

But will it mean more state and local tax revenue or less? At the moment, there is no easy answer.

State legislators have little time to react, since they go into session for just 90 days starting Jan. 10. At this point, they have no hard data on a) what will be in the final bill that hurts or helps Maryland and its subdivisions, and b) what changes must be made immediately in state tax laws.

We do know many Marylanders could have their lives turned upside down.

People who spend large sums supporting themselves or family members in assisted living or nursing home facilities, or those with giant family medical expenses, no longer get to claim these payments as a tax offset under the House-passed version.

That could lead to hefty rises in tax bills for them, putting themselves and their loved ones in financial difficulty.

No more write-offs for state and local taxes. This adds to every Marylander’s tax burden. How will this affect the state’s tax receipts?Taxing Time for MarylandEvery analysis of the dueling House and Senate tax bills confirms that well-to-do Marylanders will reap huge tax savings, middle-class folks could receive either a small reduction in federal taxes or a larger tax bill from the IRS, and the lower class will see its tax bracket rise.

The rich get vastly richer, the poor get little if any help and the middle class get a relatively middling savings.

The “trickle-down” theory of economics is alive and flourishing in the Grand Old Party.

But how will this play out in government budgets in the Free State?

There will be far more uncertainty among Marylanders who joined the Obamacare program. Health-care insurance bills are likely to rise 10 percent or more each year under the GOP’s tax-cut bill. Potentially 13 million Americans could lose health care coverage.

That could reverberate in Maryland with hospitals bearing the brunt of thousands of newly uninsured citizens flooding emergency rooms with little or no money to pay for medical treatment.

More to Come

Meanwhile, Republicans are making no secret of their real targets: safety-net programs, especially Medicare, Medicaid and Social Security. Republican Sen. Marco Rubio admitted as much last Wednesday, stating the “next step” is going after these big-ticket federal programs.

Why? Because the GOP’s tax-cut bill saddles the nation with gigantic new deficits — $1.5 trillion over 10 years. Another federal law requires Congress to make budget cuts as an offset.

Additionally, economists say the tax-cut bill will spawn rapid increases in inflation, which has been virtually nil in recent years. Rising inflation dampens economic growth, which was the raison d’etre for the GOP tax cuts.

How will all this impact Maryland?

Will companies with major Maryland employment centers reward stockholders when the corporate tax rate is chopped nearly in half or will they reward workers? Will firms hire additional employees or use the tax savings to automate production facilities and cut back on employment?

These are the kinds of questions fiscal analysts in Annapolis and county seats had better get a handle on sooner rather than later.

Placing a Big Bet

The Republican tax cut has not been wildly popular with Americans, according to polls. They seem to grasp that the vast majority of financial benefits flow to those who already live comfortably or to corporations.

Yet the GOP is placing a gigantic bet on the party’s ability to persuade voters that the tax-cut bill is a win-win for everyone. The fate of Republican dominance in Congress could depend on voters’ sentiment toward the tax-cut measure likely to gain final approval by Christmas.

Meanwhile, Gov, Larry Hogan, county executives and legislators have to cope with the impact of these fiscal changes on state and local budgets now being put together.

Hogan already is  planning to sell hundreds of millions of dollars of private-activity bonds before year’s end because the House bill eliminates these kinds of bonds — a move by Washington that could undercut all kinds of private-public partnerships like the Purple Line, affordable housing and student loans.

What other government funding programs are at risk?

When the Board of Revenue Estimates meets later this month, it could still be largely in the dark as to the ramifications of those taxing negotiations in Washington.

By the time the board meets again in March, far more will be known about the tax bill’s impact on states and localities. The board’s revenue revisions that month could prove pivotal in determining what immediate steps are necessary to adjust state tax policy.

Will the General Assembly have time in its 90-day session to make those adjustments? Will the governor fight or accept those changes?

Even in an election year, lawmakers might find themselves facing an extended session or a special session to grapple with the impact of the GOP tax bill on Maryland’s finances.

###