Local hospitals unlikely to consolidate
But CEO of JCMC thinks it would be a good idea
by Ray Smith
Reporter staff writer
Aug 14, 2011 | 3422 views | 0 0 comments | 12 12 recommendations | email to a friend | print
TOO MANY HOSPITALS? – Hoboken University Medical Center was a part of a three-hospital study for Hudson County about the possible consolidation of services.
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A recent state-authorized report on Hudson County’s hospitals recommended that three of the six local facilities try to consolidate services, and at least one hospital CEO agrees.

But the impending sale of two of the three hospitals to private companies may make consolidation less urgent, since they will no longer be heavily relying on state funds. The sales will also weaken the state’s ability to force changes in their operations.

In December 2009, Christ Hospital in Jersey City, Hoboken University Medical Center, and Jersey City Medical Center were asked to take part in a study conducted by Navigant, a consulting firm hired by the New Jersey Health Care Facilities Finance Authority (NJHCFFA), to examine how the hospitals could consolidate services as a cost-saving measure.

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‘I don’t expect any major changes any time soon.’ – Joan Quigley, spokesperson for HUMC

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At the time, the three hospitals were receiving large annual grants from the state, and government officials wanted to find ways to save money. The state’s answer was to authorize a consolidation report released two weeks ago.

“Each hospital received a $7 million stabilization grant in State Fiscal Year 2010 in addition to other state subsidies,” according to the report. “The $21 million in combined stabilization grants to these hospitals were more than half of the total stabilization grant funding available [in New Jersey] that year.”

The hospitals also received stabilization funds in 2011.

In order to enforce the recommendations in the report, the state could have used the funding as leverage. But two of the three hospitals in the report are now in the process of becoming for-profit entities and less likely to need stabilization funds.

JCMC chief is in favor

Linda Hughes of the NJHCFFA, based in Trenton, said it’s now up to the executives of the individual hospitals to follow the recommendations in the report.

Joseph Scott, the chief executive officer of Liberty Health at Jersey City Medical Center, said he is actually in favor of consolidation.

JCMC is one of the only two hospitals in Hudson County that will remain non-profit in the near future. Hoboken’s hospital is being sold to a for-profit company, as is Chris Hospital. Meadowlands in Secaucus was sold last year, and Bayonne Medical Center was sold three years ago. The only other non-profit hospital is Palisades in North Bergen.

Scott of JCMC said he thinks the state still can insist on consolidated services in the process of approving the hospital sales.

“I think patients will get higher quality, lower cost health care when hospitals consolidate services,” Scott said.

All three hospitals have improved their “overall quality score” from the state between 2007 and 2009, but only Jersey City Medical Center consistently scored above the New Jersey average, according to the recent report. The report also said “none of the hospitals are particularly strong performers in quality or patient satisfaction.”

The report recommended the three hospitals should “reduce excess/bed capacity” and “optimize the efficient use of capital over the longer term by exploring facility consolidation options.”

The report predicted any consolidation would lead to “significant changes in the existing community and organizational dynamics in Hudson County.”

However, far from weakening the state’s ability to influence consolidation, Scott believes the transfers of ownership provide an opportunity for the state to enforce some of the recommendations in the report.

“Since someone is asking the state for a new [hospital] license, now’s an ideal opportunity to consolidate,” Scott said.

The state Department of Health can set certain conditions before a hospital acquisition, outlining what needs to be followed once the new ownership takes over.

Calls to Christ Hospital for comment were not returned.

“The leverage might be weakened,” Scott said. “But I think if we could implement some of the recommendations, Hudson County health care could be stronger.”

Some have worried that for-profit companies will cut certain needed services in order to make their operations more profitable. For a related story about the trend in hospitals going for-profit, see last week’s newspaper at hudsonreporter.com.

Hoboken’s comments

“Our only comment to the Navigant report’s findings is to reaffirm our commitment to operating HUMC as a full service acute care community hospital,” according to a statement from HUMC Holdco, the company that bought Bayonne Medical Center and is buying Hoboken University Medical Center.

Holdco said that HUMC, along with Bayonne Medical Center, is committed to working with the Department of Health and Senior Services to improve patient care.

Joan Quigley, a spokesperson for HUMC, said all of the hospitals in the report have made attempts in the recent past to talk about the possible consolidation of services.

“There are a couple of problems,” Quigley said. “Anti-trust laws forbid hospitals from sharing financial data with one another, so they can’t talk about who is making money or losing money on the services.”

Quigley said a consolidation of services might be difficult because patients in Hudson County often go to certain hospitals for all their health needs.

“Bayonne people might not come to Hoboken, and the North Hudson people probably won’t go to Jersey City, especially with the traffic tie ups in the area,” Quigley said. “The ideas are interesting, and all the CEOs have agreed to come together, but I don’t expect any major changes any time soon.”

A spokesperson from the Department of Health and Senior Services did not wish to comment last week on the impact of the sales of the hospitals mentioned in the report.

Hospital loyalty is local

The report, analyzing information such as bed capacity in hospitals and discharges from 2009, seems to bear out Quigley’s statement. The 135-page document shows that many residents, when possible, do not leave their municipality for hospital care.

Jersey City Medical Center had the most discharges of all six Hudson County hospitals in 2009, with 16,417. Ninety two percent of the discharges were residents from the immediate surrounding “market area” of the hospital.

Christ Hospital of Jersey City had a total of 11,954 discharges in 2009, with 93 percent from the market area.

HUMC had 9,690 discharges in 2009, with a majority of the patients from Hoboken, Union City, West New York, and North Bergen.

Palisades Medical Center in North Bergen had the fourth most discharges, with 9,523 in 2009, but was not a part of the consolidation report. Palisade’s patients come primarily from Union City, West New York, and North Bergen.

Bayonne Medical Center, also not part of the consolidation study, had 6,080 discharges in 2009, with 4,355 patients from Bayonne.

Meadowlands Hospital in Secaucus had the lowest amount of discharges out of the six Hudson County facilities in 2009, with 5,339.

Ray Smith may be reached at RSmith@hudsonreporter.com

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