Sheppard Pratt Builds New Facility

By Bruce Hershfield, MD

[Fall 2003; Vol. 30, No. 1; Pg 1]

On May 19, 2003, construction workers began building a 192- bed, $90 million acute care facility for the Sheppard Pratt Health System. Once it is completed, in about two years, Sheppard’s adult inpatient services will move into it from the original “A” and “B” buildings.

According to Steven S. Sharfstein MD, Sheppard Pratt’s President, “It had been clear for some time that the 19^th century asylum had become obsolescent in the context of modern inpatient psychiatric care.” When Sheppard Pratt opened about 110 years ago, the buildings were designed to focus on patients residing in home-like environments, as they often stayed for months if not years. In the 1980s and ‘90s, hospital stays became shorter and care became much more medically oriented, with the focus on stabilizing patients and then moving them to other levels of care. As a result, a higher percentage of patients at any one time were acutely ill. The large units, with their nooks and crannies, made it hard for nursing staff to supervise and observe patients adequately, and the lack of privacy in the large rooms became an issue. In 2002, the Board of Trustees decided to emphasize Sheppard Pratt’s core mission—caring for the seriously ill in an acute hospital setting. After three consecutive years in the black, the board decided that it could safely invest in building a state-of-the art acute care facility.

Because the inpatient component only represents about 40% of Sheppard Pratt Health System’s revenue, due to shorter lengths of stay and low reimbursement rates by Medicaid and Medicare, the Board had found it necessary to make some adaptations. For some time, the system had been expanding into a variety of community-based settings. For example, it had become the largest provider of special education services for children and adolescents in the state. Two years ago, they were also able to increase their Medicaid payment rates dramatically which made the future for hospital care much more feasible.

Acquiring Taylor Manor in 2002, also improved the system’s capacity, by increasing the volume of patients without commensurately increasing the expenses. Having two sites–-at Sheppard Pratt in Towson and Sheppard Pratt in Ellicott City--particularly expanded the volume of inpatient care and residential care for children and adolescents. At this time, the system is the largest provider of care for the seriously and persistently mentally ill in Maryland.

Dr. Sharfstein pointed out, the day before the groundbreaking for the new facility, that in the early l990s the system had gone through many painful changes in order to survive. The hospital staff, which felt battered by many of the changes in the way that health care was being financed, decided to try to meet the demands of managed care. The system was also able to attract funding–mostly public dollars–so that it could keep going. Later in the ‘90s, its endowment grew because of the success of its investments, from about $30 million to over $100 million during the decade. Because of that growth, the Board was able to go to the tax-exempt bond market and to borrow the money to build the new facility.