'Losing St. Mary will be devastating' Hospital votes to close after buyer pulls out; city will meet Wed. on options
by : Tom Jennemann
Jan 17, 2006 | 1505 views | 0 0 comments | 9 9 recommendations | email to a friend | print
St. Mary Hospital, a medical and surgical hospital in Hoboken that was built in 1863, is in jeopardy of closing after the scandal-besieged University of Medicine and Dentistry of New Jersey in Newark withdrew its bid to buy it.

The Board of Directors of the Bon Secours Health Care System voted Dec. 30 to close the hospital over the next 12 months unless they can find another buyer.

Bon Secours, a Catholic health care system based in Marriottsville, Md., bought St. Mary Hospital in 2000. In 2001, Bon Secours formed a partnership with Canterbury Health, the company that owns Christ Hospital in Jersey City.

But that doomed union dissolved on Dec. 31, 2004 after Canterbury alleged the Bon Secours did not disclose the true financial health of St. Francis in Jersey City and St. Mary.

Since that time, there has been talk that St. Mary is up for sale. In January of 2005, the Bon Secours Board of Directors authorized management to "pursue discussions with a third party," which was UMDNJ. But now, according to city and Bon Secours officials, UMDNJ has pulled the plug on the negotiations.

Losing money According to a statement released by Bon Secours, since the company took over the hospital in January of 2000, they have provided loans to St. Mary for in excess of $118 million to fund operating losses.

The hemorrhaging of money has gotten worse recently, said Bon Secours officials. In fiscal year 2005, the hospital lost an estimated $27 million, and in the first quarter of the current fiscal year, which began Sept. 1, the hospital lost between $2 million and $3 million per month.

At this pace, according to the statement, St. Mary would stand to lose $35 million this fiscal year.

Also, St. Mary officials claim the hospital needs a $27 million infusion of cash to improve the aging building infrastructure and physical plant.

"Under these circumstances, [Bon Secours] can no longer afford to support St. Mary Hospital] operations," the statement read.

On Dec. 30, St. Mary Hospital filed with the New Jersey Department of Health a Certificate of Need application to close acute care services at the hospital over the next 12 months.

"This action was taken as a last resort," the statement read. "It is our intent to operate St. Mary Hospital with its current services until a viable alternative is found or until the Certificate of Need is approved and planned [which would begin the shutting-down process]."

City will meet Mayor David Roberts said last week that the City Council will hold a special meeting on Wednesday to hire a special attorney to figure out how to stop the hospital from closing, and to look into why it might be losing $3 million per month.

Thursday, Roberts said he has reached out to LibertyHealth, which operates the Jersey City Medical Center emergency room in affiliation with Mt. Sinai School of Medicine in New York, to see if they might be interested in investing in St. Mary.

Roberts said that, at the very least, he would like to see a small hospital with an emergency room and a maternity ward.

"I'm going to dedicate myself for the next several months to do what I can to see that a city of Hoboken's size and stature has the medical services that we require," Roberts said.

Roberts added that he has personally talked to acting Gov. Richard Codey, state Sen. Bernard Kenny, and U.S. Rep. Robert Menendez (a Hoboken resident) about the situation.

Hoboken resident Jonathan Metsch, who is CEO and president of LibertyHealth, said Thursday that his company would be willing to take over the emergency care if no one else steps up. According to Metsch, LibertyHealth's Board of Directors authorized a takeover of the emergency room, if necessary, on Tuesday.

9/11 proved need Dr. Angelo A. Caprio, a lifelong Hoboken resident and a doctor at St. Mary Hospital, implored the City Council and mayor at Wednesday's council meeting to keep the public pressure on Bon Secours and to help in the search for alternatives.

"There is a definite need for a hospital in this community," Caprio said Wednesday. "This is a really bad situation."

He added that a hospital in Hoboken, because of its location as a transportation hub and proximity to Manhattan, is necessary for strategic reasons.

"On 9/11 [St. Mary Hospital] set up a triage center at the train terminal that treated over 8,000 people," Caprio said. "There is no possible way that a hospital located out of town could have set up as quickly or treated as many people as we did."

Large Hoboken employer With over 1,000 employees, St. Mary Hospital has long been one of the city's largest employers of Hoboken residents. Primarily a residential city, Hoboken has very few large-scale employers. The hospital has always had a reputation for hiring residents.

Since the Maxwell House Plant closed in 1992 until the Southern Waterfront Corporate Center with John Wiley and Sons opened in 2002, the hospital has been the city's largest employer.

On Wednesday, officials from Bon Secours gave the employees at the hospital notice of the possible closure and job layoffs.

Beverly Altomare, the president of St. Mary Hospital Auxiliary, said that St. Mary is a venerable Hoboken institution that deserves to be saved.

"We are a small, tight-knit community, and losing St. Mary will be devastating," Altomare said. "This is a hospital that has employed a lot of Hoboken residents, and it's a disgrace that they are even thinking about doing something like this. These are people with mortgages and families."

Altomare added that the St. Mary Hospital Auxiliary has raised $500,000 for the construction of a new emergency room at the hospital, and now she doesn't know what is going to happen with that money.

Troubles at UMDNJ While officials at UMDNJ didn't return phone calls to comment for this story, UMDNJ recently has been experiencing a major mismanagement scandal. Last week UMDNJ ceded control of its day-to-day operations to a federal monitor.

According to a story in the Star Ledger, UMDNJ became the first school in the nation ever to make a deal with a U.S. attorney to avoid a criminal fraud prosecution.

According to the Ledger story, the trustees of UMDNJ approved an agreement acknowledging that UMDNJ's hospital deliberately defrauded the federal and state Medicare and Medicaid programs of at least $4.9 million, a figure that is likely to grow significantly once the investigation is complete.

U.S. Attorney Christopher Christie has told the trustees they had to accept a federal deal, called a deferred-prosecution agreement, and relinquish control of the school's $1.6 billion budget. If they refused, the Ledger story said, UMDNJ would face a criminal prosecution that would cut off the institution from federal funding and shut down its hospital and the state's only medical and dental schools.

A criminal complaint filed against UMDNJ in U.S. District Court in Newark by the U.S. attorney's fraud department charges that UMDNJ knowingly double-billed the government for Medicare and Medicaid patients, even after its attorneys discovered they were breaking the law.

According to acting Gov. Richard Codey, UMDNJ will have to reimburse the state and federal governments "tens of millions" for overbilling by University Hospital.

Even if this scandal isn't directly responsible for UNDNJ pulling out, it's likely that its current predicament would make the hospital less amenable to taking on the risk of another hospital that is currently losing money, and would need tens of millions of dollars in improvements to an aging infrastructure.

Plenty of beds If St. Mary were to close, would there be enough beds in other area hospitals for patients? According to Bon Secours' statement, there is enough capacity to absorb the closure of services at St. Mary Hospital.

"In recent years, utilization at St. Mary Hospital has declined to 38 percent [occupancy], with the most notable decline in medical/surgical services," the statement read.

It added that Christ Hospital in Jersey City, Wilzig Hospital (the new Jersey City Medical Center) in Jersey City, and Palisades Medical Center in North Bergen have a combined total of 821 beds, located less than five miles from St. Mary Hospital.

Additionally, there are eight hospitals, with a capacity of 1,900 beds, within nine miles of St. Mary Hospital.

Other Bon Secours sales The board of Bon Secours has already approved the sale of its other New Jersey facilities, both of which are in Jersey City. St. Francis Hospital, which stopped operating as an acute care hospital in 2001, was sold to Exeter Properties, a New Jersey-based residential developer.

The Franciscan Home and Rehabilitation Center, formerly the Jewish Home and Rehabilitation Center, was sold to Omni Health Management and is still operating as a long-term care facility.

Hoboken's community hospital St. Mary Hospital was opened on Jan. 8, 1863 by the Franciscan Sisters of the Poor, an international and multi-cultural religious congregation founded in 1845 in Germany. According to local historian Marie Luizzi, the hospital was opened during the Civil War as a location to treat the returning wounded. According the Luizzi, the sisters purchased five lots at Fourth and Willow streets. The money to pay for the land was raised though donations. The Stevens family, through the efforts of Martha Bayard Stevens, donated additional land and endowed a St. Martha's Ward to the new hospital. NY mayor treated One of St. Mary's more interesting patients was New York Mayor William Jay Gaynor, who was shot on Aug. 9, 1910 as he boarded the S.S. Kaiser Wilhelm der Grosse at the Hoboken piers. The assailant was James J. Gallagher, who had been fired from his job in the New York City Docks Department and blamed the mayor for his troubles. Gaynor was rushed to St. Mary Hospital, where he stayed for over three weeks in critical condition. In war, peace, and TB According the Luizzi, when America entered World War I in 1917, the United States government took over the operation of St. Mary Hospital. Since Hoboken was the main port of embarkation for the nearly two million soldiers, the hospital became known as "Embarkation Hospital Number One." After the war, the Army returned the hospital to the Franciscan Sisters. Luizzi added that during the Great Depression, the sisters opened a soup kitchen that fed 200 to 300 people twice a day. This facility remained open for many years. Also, in 1927, St. Mary opened one of the first tuberculosis clinics in the state. Sold In 2000, after 142 years of operation, St. Mary Hospital was sold to Bon Secours Heath Care System. In 2001, Bon Secours formed a partnership with Canterbury Health, the company that owns Christ Hospital in Jersey City. But that union ended on Dec. 31, 2004 after Canterbury claimed that Bon Secours allegedly did not disclose the true financial health of St. Francis Hospital in Jersey City and St. Mary. Since that time, St. Mary has been for sale. The University of Medicine and Dentistry of New Jersey seemed to be the best suitor until a deal fell apart recently. Unless someone else steps in, the hospital will close in 12 months. Tom Jennemann can be reached at tjennemann@hudsonreporter.com
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