Hospital execs react to consolidation report as turnover muddles Hudson County outlook

TRENTON – The hospital market is overpopulated in Hudson County, according to a state report, and the government isn’t going to be handing over millions of dollars every year to prop up facilities that provide overlapping services.

After three hospitals in Jersey City and Hoboken raked in a total of $21 million in 2010 – more than half of the stabilization funds the state granted for failing hospitals – the state began a consolidation study to explore options for industry stability and an end to state subsidy. Most of the scenarios focused on consolidating services such as obstetrics and pediatrics, but also mentioned one hospital, Christ Hospital, possibly closing and selling its valuable land for residential development along the Palisade cliff.

The other two hospitals examined were Hoboken University Medical Center (HUMC) and Jersey City Medical Center (JCMC), comprising three of the six hospitals in the county.

As the examination was ongoing, HUMC – which is owned by the city and controlled by a quasi-governmental authority – announced it had come to terms on a sale to the for-profit group that owns Bayonne Medical Center. Coincidently, just as the study was released, Christ Hospital announced it was also being sold to a California for-profit, Prime Healthcare Services, which owns 13 hospitals in the Golden State.

Lex Reddy, president and CEO of Prime Healthcare Services, said Thursday that he was not at all considering closing the hospital, but rather was committed to aiding the debt obligations of the hospital, which is experiencing significant financial losses every month, and $35 million in infrastructure improvements for the aging facility in Jersey City Heights.

Reddy said, from what he understands, Christ Hospital was singled out in the report for possible closure because the organization relied on no state or municipal bonds. “Everyone thought it would be easier,” he said, but his intention is to keep all services open.

Asked whether that meant that he wouldn’t consider the consolidation recommendations in the study, he said not at all. The new owners are willing to work with the state to achieve the goals in the report, he said, but only as it’s balanced with the goals of the community the hospital serves.

The three hospitals have 763 beds combined, but the report – compiled by Navigant Consulting of Hamilton – found that there was “substantial surplus of maintained beds (264) which is projected to increase modestly by 2014 to a surplus of 268 to 290 beds.”

A representative of HUMC Holdco L.L.C., the group purchasing HUMC, said, “Our only comment to the Navigant report’s findings is to reaffirm our commitment to operating Hoboken University Medical Center (HUMC) as a full-service acute-care community hospital. HUMC Holdco recognizes HUMC’s vital role in providing quality care to its patients. The hospital provides a critical lifeline to the Hoboken community and we will never underestimate this important role.

“If our purchase of the hospital is completed,” said Anna Tenuta of Hellerman Baretz Communications in an email, “HUMC Holdco will make investments in HUMC to ensure it provides the best quality patient care and serves the Hoboken community for years to come. We, along with Bayonne Medical Center and HUMC, are also committed to working with the Department of Health and Senior Services to improve patient care and efficiency in Hudson County.”

The State Health Planning Board is hearing the proposed sale of HUMC to the Bayonne Medical group next Thursday, one of several approvals the parties need before the sale is complete.

While the new owners of Christ and HUMC aren’t making any firm commitments to the recommendations in the Navigant report, JCMC is all ears.

“We are pleased the Navigant Report has been released and acknowledges many of the same priorities which Joe Scott recognized when he became the President and CEO of the Jersey City Medical Center four years ago,” emailed Mark Rabson, director of Public Affairs for Liberty Health, owners of JCMC. “The report confirms that a major consolidation of services needs to be achieved in order to have a fully functioning, high-quality, cost-effective health care system in Hudson County.

“Healthcare in Hudson County is in trouble and needs fixing. Today, as it was four years ago, Hudson County has a surplus of hospital beds, many services are duplicated, and people are leaving the county for specialized health care needs,” Rabson wrote. “Mr. Scott knew changes needed to be made and his first priority was to define a new mission and vision for the medical center.”

While showing the forward-thinking successes that JCMC has had – such as being rated number one in New Jersey hospitals under 350 beds by Castle Connolly – Rabson said the new competition is driven primarily by profits, not quality of service.

“The Navigant Report fails to mention and recognize that our competitors are now, or are considering becoming, for-profit organizations using an out-of-network insurance model. In contrast, Jersey City Medical Center remains a community-based, non-profit medical institution which is in-network with all major insurance companies so that we can accept our patients’ medical insurance and continue to serve the entire community,” Rabson said.

“We are pleased the Navigant Report also recognized Jersey City Medical Center’s physical plant as the most functional in the area, with the most potential for future use, and that only Jersey City Medical Center had an occupancy rate of 80 percent in 2010, which was well above both its competitors and the state average. Unfortunately, because of the current climate in Hudson County, it seems recommendations to consolidate will not be achieved and the status quo will likely continue.”

According to the Navigant report, “(W)e believe maintaining the status quo is not a practical or appropriate scenario and should be avoided if at all possible.”

The full report can be read here: Hudson County hospital consolidation report.

Hospital execs react to consolidation report as turnover muddles Hudson County outlook