This was in response to an announcement that the University of Medicine and Dentistry of New Jersey, considered the most serious suitor to buy the struggling facility, has officially and permanently pulled out of negotiations.
The governor said there is a "better than 50/50" chance that St. Mary can be saved.
Currently, Hoboken's only hospital is on the verge of closing because of financial losses. Unless its owner, Bon Secours Health Care Systems, a private Catholic health care company based in Marriotsville, Md., can find a buyer in the next several weeks, the hospital will close by the end of the year.
City steps up But despite the news of UMDNJ's withdrawal, there is reason for optimism. Mayor David Roberts has announced that the City of Hoboken is now interested in purchasing and running the hospital. He said Thursday that there could be a "handshake" agreement with Bon Secours by next week.
"It's not often in public life that you are given the opportunity to accomplish something like this," Roberts said Thursday.
But his announcement raises many questions, and specific answers are scarce.
According to Bon Secours officials, the hospital was losing between one and three million dollars every month. Also, the city's budget this fiscal year was extremely tight.
While the city has sufficient bonding capacity, and the Hudson County Improvement Authority has said it would consider helping to finance physical plant improvements, Roberts will have to show the public that the added risk would not put undue stress on the taxpayer.
Roberts said that the hospital can make money, and that he will not support any deal that will lead to undue economic difficulties. He said that right now, the city could not release any detailed information about the transaction because negotiations are pending.
Ace in the hole Roberts and state Sen. Bernard Kenny have brought in former Robert Wood Johnson University Hospital President Harvey Holzberg as an adviser to develop a business model to bring the hospital back to profitability. Holzberg was also president and chief executive officer of Jersey City Medical Center for six years.
Roberts praised Holzberg's abilities Thursday.
"He is the reason why this is going to be a huge success," Roberts said of Holzberg. "He is considered a top flight administrator who will make [St. Mary] profitable in the next seven months."
It's also possible that Holzberg would become president of St. Mary if the city were to take over operations.
Joan Quigley, a state assemblywoman and spokesperson for Bon Secours, said that she is hopeful that Holzberg, who has a solid track record in turning around other struggling hospitals, can develop a workable business plan for St. Mary Hospital.
Reasons why it might work Quigley said there are several advantages to the city taking over the hospital and that Bon Secours is pursuing this option as their "number one priority."
She said that as a publicly owned hospital, it would be eligible for a higher Medicare and Medicaid reimbursement rate. Also, she said, the city's risk would be mitigated because the hospital's property might become a "gift to the city," which would give instant equity to the project. The value of the property could serve as an insurance policy, should the turnaround be unprofitable.
Also, the hospital could be eligible for up to $27 million in federal funds, which could be released by Corzine. Those funds could be used to offset operating costs for the first several months the city runs the hospital.
Councilman Michael Russo said Thursday that before the city assumes any risk, there must be an acceptable business plan in place.
"We will not approve a plan that puts the taxpayers in jeopardy," Russo said. "There are many details that need to be worked out, but we believe that this is very doable. Everyone is committed to keeping St. Mary Hospital open as a viable primary care facility, and at the end of the day we are optimistic we will be successful."
No to long-term nursing Another option that has been floating around for the past several months has been the prospect of Omni Health Management of New Jersey buying the hospital to run scaled-down services at St. Mary.
Omni purchased a rehabilitation center in Jersey City last year. The purchase occurred after Bon Secours closed St. Francis Hospital in Jersey City and sold most of the property to private developers. Omni bought the Franciscan Home and Rehabilitation Center, formerly the Jewish Home and Rehabilitation Center.
Omni runs a number of other long-term care facilities. If Omni were to buy the hospital, the speculation is that they would keep open a small acute care "emergency room," and would offer long-term care beds and a modicum of office space for doctors' offices and specialists.
Without mentioning Omni by name, Corzine said Wednesday that Hoboken is not "looking for another nursing home." He added that he is committed to keeping a full service acute care hospital open at St. Mary's, and that is their first priority.
Roberts also dismissed the idea of bringing in a long- term care facility.
"I will not accept anything but a community hospital," Roberts said. "Right now we have a glorious opportunity that I am proud to be part of."
University of Medicine and Dentistry of New Jersey is out About a year and half ago, Bon Secours entered into negotiations with the University of Medicine and Dentistry of New Jersey to buy St. Mary Hospital. But in January, the U.S. Attorney announced that it was investigating UMDNJ for alleged massive illegal over-billing of Medicaid. Soon after that, UMDNJ, for the first time, pulled out of negotiations to buy St. Mary Hospital.
But after lobbying from Mayor David Roberts and state Sen. Bernard Kenny, UMDNJ was given permission to rejoin negotiations, despite the fact that it is currently overseen by the U.S. Attorney's office.
But, by all accounts, those talks with UMDNJ have been on life support for some time. It was also recently announced that, according to Gov. Jon Corzine's state budget, UMDNJ's state aid could drop by $49 million, or 20 percent, to $194 million from $243 million. Also, Corzine's budget includes $430 million in new taxes on hospitals.
All of these factors have led to UMDNJ officially pulling out of the negotiations.
Joan Quigley, a state assemblywoman and spokesperson for Bon Secours, said they were aware that UMDNJ's problems might preclude them from buying the hospital.
"We saw the handwriting on the wall for some time now," Quigley said. "It was a big disappointment, but now we're pleased that the city willing to step up to the plate."
Managing Editor Tom Jennemann can be reached at firstname.lastname@example.org.