St. Mary's current owner, Bon Secours Health System, Inc. (BSHI), a private Catholic health care company based in Marriotsville, Md., is currently negotiating to transfer ownership to the city of Hoboken, a move that is strongly supported by Mayor David Roberts, state Sen. Bernard Kenny (D-Hoboken), and most of the hospital's current staff.
Currently, Hoboken's only hospital, the oldest in the state, is on the verge of closing because of financial losses. The hospital has over 1,000 employees and 328 beds.
According to Bon Secours officials, Holzberg and a yet to be named team of financial managers will replace Cambio Health Solutions, a hospital operations firm based in Brentwood, Tenn., which has provided management services to St. Mary Hospital since August 2004.
Expert in turnarounds According to Roberts, Holzberg has a solid track record of hospital turnarounds. He took the reins at Robert Wood Johnson University Hospital, formerly Middlesex General, in 1989 at a time when the hospital was struggling financially. Since then, the hospital has rebounded and developed a positive reputation for its clinical, education, research, and community outreach programs.
The programs established under Holzberg's watch included: the designation of the hospital as a Level I Trauma Center and a Regional Perinatal Center; the developments of The Heart Center and The Vascular Center of New Jersey; centers for heart, kidney, and pancreas transplantation; the Bristol-Myers Squibb Children's Hospital at Robert Wood Johnson University Hospital, and The Cancer Hospital of New Jersey.
"The city sees Mr. Holzberg's leadership as critical to this transition. Harvey's track record as a health care leader is second to none," Roberts said in a statement. "His commitment is a key part of our plans to maintain St. Mary as a thriving, high quality, acute care hospital for this community."
Dr. Joseph Scerbo, president of the St. Mary Hospital medical staff, said hiring Holzberg is a positive step in the city's acquisition of St. Mary.
"The decision to return day-to-day operations to local control, and especially to an experienced administrator like Harvey Holzberg, has the enthusiastic support of our doctors and our entire hospital community," Scerbo said.
Many challenges In December, Bon Secours, the health care company that took over operations in 2000, voted to close the hospital in one year if they couldn't find another buyer.
The University of Medicine and Dentistry of New Jersey, initially considered the most serious suitor to buy the struggling facility, pulled out of negotiations in May.
On the heels of the UNDNJ's announcement, Roberts and Kenny, in a bold and risky move, said that the city of Hoboken is interested in purchasing and running the hospital.
Roberts said that the hospital can make money, and that he would not support any deal that would lead to undue economic difficulties.
But there are certainly challenges to overcome.
According to Holzberg, it is going to take about $65 million in improvements to the facilities to bring the hospital up to state-of-the-art standards. Essential improvements include upgrading the hospital's Emergency Room and transforming shared rooms into single rooms with showers.
If the city were to take over the hospital, it could, with Gov. Jon Cozine's approval, be eligible for $26 million in federal funding, which could go toward improvements and offset initial operating losses.
The Hudson County Improvement Authority also has given indications that it would help finance a capital improvement program.
Some positives Joan Quigley, a state assemblywoman and spokesperson for Bon Secours, said that as a publicly owned hospital, St. Mary would be eligible for higher Medicare and Medicaid reimbursement rates. Also, she said, the city's risk would be mitigated because the hospital's property would be given 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.
It's also likely, Quigley said, that Bon Secours would give the city an undisclosed lump sum to offset operating costs in the first several months of the transition.
Legislative approval needed Another major hurdle for the sale to go through is that special legislation is needed to make the transaction legal. Every year municipalities are only allowed to increase spending by a certain percentage. By taking on the expense of running a hospital, the city would easily cross that threshold, according to a recent decision by state Department of Community Affairs Commissioner Susan Bass Levin.
To get around this, Kenny and Assemblyman Albio Sires (D-West New York) will likely support legislation that gives the city the authority to create a "hospital authority," which would function in a similar fashion to a parking authority.
It is possible that this could be voted on before the end of the current session of the legislature, which ends June 30.
Other government-owned hospitals If the sale goes through, St. Mary Hospital would become the second publicly owned hospital in the state, joining Bergen Regional Medical Center in Paramus. Bergen Regional, which is the largest in the state, is county-owned, although a private company manages it.
Locally, Jersey City Medical Center was also a city-owned hospital until 1988. Like many industrial cities, Jersey City struggled in the 1960s and 1970s, and with a lack of maintenance and improvements, the hospital fell into disrepair.
Liberty Health Services privatized the hospital, and in 2004 the brand new Jersey City Medial Center Wilzig Hospital opened.
Across the Hudson, the New York City Health and Hospitals Corporation oversees the city's public health care system in all five boroughs. The corporation consists of 11 acute care hospitals, six diagnostic and treatment centers, four long-term care facilities, a certified home health care agency, and more than 80 community health clinics.
But not everyone believed that the government should be in the hospital business. In the mid-1990s, then-Mayor Rudolph Giuliani pushed to privatize several hospitals.
Giuliani said that private operators would be able to provide higher quality care at a lower cost than the city-run system. He said the public hospital system was built before Medicaid and Medicare and that the system is "is out of step with the realities of the current health marketplace."
Giuliani attempted to privatize several of the city's hospitals, but was blocked by the courts.
When Mayor Michael Bloomberg became mayor, he pledged to modernize system, and invested hundreds of millions of dollars in subsidy and capital improvements. But critics still question the role of public hospitals and charge that privatization might be the best route.
About Holzberg Prior to taking the helm at Robert Wood Johnson University Hospital, Harvey Holzberg was president and chief executive officer of the Jersey City Medical Center for six years, where he was instrumental in converting the medical center from a struggling public hospital to a financially sound, private, not-for-profit institution.\
Before coming to Jersey City, he was senior vice president of administration at Lutheran Medical Center in Brooklyn, New York, where he increased community access to quality health care by developing the Sunset Park Family Health Center, the largest of its kind in the country.
After serving four years in the United States Marine Corps, Holzberg earned a bachelor's degree from New York University-School of Commerce, Accounting, and Finance, and a master's in business administration from Bernard Baruch School of the City University of New York.
Holzberg is a fellow of the American College of Healthcare Executives and a former member of the Regional Policy Board of the American Hospital Association. As chair of the Association of American Medical College-Council of Teaching Hospitals, Holzberg served on the Executive Council and Executive Committee of the Association of American Medical Colleges.
Holzberg and his wife, Janice Chiantese, live in Jersey City and have three children and six grandchildren.
Tom Jennemann can be reached at firstname.lastname@example.org