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Robert Wood Johnson Hamilton President Says Community Hospitals Can Learn from For-Profits

5-23-13

Health care has been a hot topic nationally and in the Garden State with recent changes. Robert Wood Johnson University Hospital Hamilton President and CEO Anthony Cimino told NJ Today Managing Editor Mike Schneider that the overall environment in health care today is full of challenges and opportunities. The industry has to deal with low reimbursement rates and the changing dynamic caused by an increased number of for-profit hospitals.

While Cimino says there are a number of issues those in the health care industry must deal with, he is optimistic about the future. “We’re seeing a great deal of work being done in concert with various hospitals as well as health systems in managing costs better, in looking for opportunities to save patients in terms of the cost of the actual delivery of the service,” he said.

A recent survey found that New Jersey is the second highest state in terms of overall medical procedure costs and that Bayonne Medical Center charges the highest prices in the nation. That medical center is a for-profit facility.

“I think that there are aspects of proprietary hospitals that non-profit hospitals can learn from. In many respects they look at their overall cost structure, they deliver a good product,” Cimino said. He explained that while Bayonne Medical Center may charge the most, there has been a longstanding disparity between what the charges are and what the managed care providers — including Medicare and Medicaid — pay.

“We clearly have lots of costs that are yet in the system that could be taken out of the system. The for-profits have driven towards that aspect while still ensuring an excellent delivery of care. So I believe that we can learn from them while we continue to have a non-profit platform here in the state of New Jersey,” Cimino said.

With the emergence of more for-profit hospitals, some worry the model of non-profits will become more difficult to manage. But Cimino is confident non-profits will find a way. “Clearly there will be a need for us to continue to operate, not only from the perspective of delivering patient care but also as an economic engine for the state of New Jersey,” he said. “New Jersey hospitals provide $18 billion worth of economic value within the framework of our state and consequently it is important for us. We’re a large employer. In many instances we are the single largest employers in our communities and that does not count the level of community asset that we are.”

Cimino said community hospitals are assets to their respective communities, not only by delivering care when it’s needed but by offering additional services like screenings to help ensure future health. He said he believes non-profit hospitals will continue to exist, though likely in a different format than they have right now.

“I think you will see a lot of consolidation over the next four to five years within our industry as we come together and we band together not unlike we currently do in the Robert Wood Johnson health system,” Cimino said. “So that things are dealt with at the system level, whether it be managed care contracting or the acquisition of supplies or materials management; whether it be integrating on a clinical basis to ensure that the delivery of care is optimum for each and every patient.”

Cimino complimented Gov. Chris Christie and the legislature on the college merger, saying it will be “fantastic for the state.” Even though UMDNJ has graduated its last class, Cimino said New Jerseyans will benefit.

“We’re not only elevating the delivery of medicine and the quality of medicine that will be provided through the educational process, but we are elevating Rutgers to a place as a national research institution and when you do that in a state with the level of population that we have, I believe over time this can only benefit all the residents of our state,” Cimino said.

While he admits not all aspects of the merger will likely be complete by July 1, he believes in time, it will be successful.

“Five years down the road from now, I think everyone will look at this particular achievement as one of the hallmarks of Gov. Christie’s administration,” Cimino said.