Merger keeps local hospital nonprofit
Jersey City Medical Center to join Barnabas Health system
by E. Assata Wright
Reporter staff writer
May 19, 2013 | 4928 views | 0 0 comments | 16 16 recommendations | email to a friend | print
The merger with Barnabas Health will allow Jersey City Medical Center to draw top specialists to its hospital who do not currently have a relationship with the facility. Pictured: Jersey City Medical Center President and CEO Joseph F. Scott (left) and Barnabas Health CEO Barry Ostrowsky sign merger agreement on May 16.
The merger with Barnabas Health will allow Jersey City Medical Center to draw top specialists to its hospital who do not currently have a relationship with the facility. Pictured: Jersey City Medical Center President and CEO Joseph F. Scott (left) and Barnabas Health CEO Barry Ostrowsky sign merger agreement on May 16.
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A year after Jersey City Medical Center (JCMC) lost a bid to take over Christ Hospital, the medical center announced that it will become part of Barnabas Health, the largest nonprofit healthcare system in the state. The merger, which must still be approved by various state agencies, continues the recent trend of hospital mergers in Hudson County.

But unlike other mergers and hospital sales that have taken place over the past four years, the marriage between Barnabas Health and JCMC means the local hospital will remain a nonprofit entity.

Other recent mergers and sales have faced community opposition because for-profit institutions have taken over local nonprofit hospitals.

Officials from JCMC and Barnabas said on Thursday, when the deal was announced at JCMC in Jersey City, that the merger will unite two similar medical systems that will bolster and improve health care for both entities.

‘Looking for a partner’

JCMC’s merger with Barnabas Health has been in the works for about six months, according to JCMC President and Chief Executive Officer Joseph F. Scott.

“We started looking for a partner and one of our board members, and [Barnabas CEO Barry Ostrowsky], and I started talking about whether there was a possibility for this to happen,” Scott told the Reporter last week. “As we explored the different options, the different things that we wanted to accomplish for the hospital, including joining a bigger system that would give us the wherewithal to continue to provide healthcare services, Barnabas Health was clearly somebody we wanted to talk to and wanted to join.”

In terms of what this will mean specifically for patients, Scott said the merger will allow JCMC to draw top specialists to its hospital who do not currently have a relationship with the facility. For example, he said the hospital currently provides acute pediatric care, but when a child needs a sub-specialist JCMC has to “send them out of the county.” Since Barnabas has pediatric sub-specialists on its staff, the merger, Scott said, will enable some of those doctors to operate from the JCMC campus.

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‘This expands our opportunity to take some of the strength that Barnabas has and bring it to our campus here.’ – Joseph F. Scott

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“This expands our opportunity to take some of the strength that Barnabas has and bring it to our campus here,” said Scott.

According to Ostrowsky, Barnabas Health has the “country’s third busiest heart transplant program. We have pediatric cardiatric surgery, the only lung transplant program in New Jersey. We have the country’s busiest kidney transplant program. We are committed to teaching, like Jersey City Medical Center. So, we have over 400 residents in our system.”

And Aetna members might once again be able to access JCMC for non-emergency in-network care. JCMC cut ties with Aetna in 2011. But Ostrowsky said Barnabas has a contract with the insurer.

JCMC and Barnabas have already signed a letter of intent. The merger must still be approved by several state agencies, including the New Jersey Department of Health and Senior Services and the Office of the Attorney General. Ostrowsky said he expects the approval process to take about six months.

Impact on workers’ contract negotiation unclear

The length of time that JCMC has apparently been negotiating the Barnabas merger overlaps with the time period the hospital has also been negotiating with Local 2254 of the American Federation of State, County, and Municipal Employees (AFSCME) and 1199J, two unions that represent various groups of hospital workers.

Union members have been without a contract since December and have accused Scott and other JCMC officials with union busting and walking away from the negotiation table. These accusations have been made often at Jersey City Council meetings and meetings of the Hudson County Board of Freeholders.

Now that the proposed merger has been made public, it is unclear what impact, if any, it will have on the pace of negotiations.

“They never discussed [the merger] or shared any info with us,” said Richard Gollin, executive director of AFSCME Council 52. “All I know is what I read in the newspapers. I can say that Barnabas Health has a much better relationship with its unions that Jersey City Medical Center has with its unions. It would be great if Barnabas took over the management at the Medical Center. But I don’t see that happening.”

JCMC denies that has not negotiated in good faith.

Consolidation of services encouraged

In March of 2010, the New Jersey Department of Health and Senior Services commissioned Navigant Consulting Inc. to do an inventory and study of Jersey City Medical Center, Christ Hospital, and Hoboken University Medical Center to determine whether the three facilities were either duplicating services or had unused beds in their hospitals.

Among the major findings that were eventually released in July 2011 (in what became known as the Navigant report) was the conclusion that, in total, Hudson County had 1,144 hospital beds. This number included beds at Bayonne Medical Center and Palisades Medical Center in North Bergen.

However, use of these beds “has decreased over the last few years, and given the relatively stable population base in the market area, is unlikely to increase to any significant extent for the foreseeable future. The current and projected demand for inpatient hospital services indicates there is a substantial surplus of maintained beds (264) which is projected to increase modestly by 2014 to a surplus of 268 to 290 beds.”

In other words, Hudson County had too many hospital beds in relation to its population. This fact, according to the study’s authors, was exacerbated by the fact that “nearly 30 percent [Hudson County] residents leave the area for inpatient hospital care, with 23 percent going to other parts of New Jersey and six percent going to New York.”

This trend was particularly true for wealthier Hudson County residents and those whom the report considered to be well-insured.

Given these findings, the report recommended ways to reduce the number of unused hospital beds in Hudson County, decrease hospital dependence on state emergency aid, and attract and retain high quality medical staff. Noting that there are “significant consolidation opportunities…in pediatrics, psychiatric services, and possibly obstetrics that would help align bed supply with need,” the Navigant study recommended that Hudson County hospitals “work collaboratively with one another and the state to explore and pursue service consolidation opportunities in the near-term.”

Since the study was released, the for-profit owners of Bayonne Medical Center have purchased Hoboken University Medical Center and Christ Hospital in Jersey City.

JCMC has tried several strategies to partner with other North Jersey institutions. Early last year the medical facility lost its bid to purchase the struggling Christ Hospital, which at the time was in bankruptcy. The hospital’s merger with Barnabas Health is clearly JCMC’s most recent attempt to follow the recommendations made in the Navigant study.

Ironically, Scott claimed that the recent conversions of Christ and Hoboken University Medical Center have actually led to a shortage of beds at Jersey City Medical Center, because JCMC accepts some insurers that the other hospitals do not, he said. Last Wednesday, he said, the hospital issued a “code purple,” whereby some people had to be discharged to free up space for incoming patients.

E-mail E. Assata Wright at awright@hudsonreporter.com.

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