BUSINESS & ECONOMY

Independent Hospitals Becoming Rare in New Jersey

By Erin Delmore
Correspondent

“We’re not the largest, we’re not in a system, we are innovative, we are creative, we are financially sound and we provide outstanding care,” said Michael Maron.

Maron is president and CEO of Holy Name Medical Center in Teaneck, one of a shrinking number of New Jersey hospitals that’s resisted pressure to merge with larger organizations.

“Do we really want to go down until there are two or three provider system, one or two major payer system and that’s it and we think it’s in everybody’s best interest? Or do we want to have a competitive marketplace?” Maron asked.

There are around 75 total hospital facilities in New Jersey. A decade ago, nearly all were independent. But that’s changing as facilities are chasing economies of scale. In greater numbers, they can negotiate higher payouts from insurance companies.

How has Holy Name resisted?

“It’s challenging, and I wish I could say with 100 percent confidence we’ll be able to continue. Do we compromise our values just to keep the lights on? Or do we figure out ways and take with the pressure to make sure that we do it the way that we want? And if some point in time we can’t, then we’re going to be faced with the decision of saying we either merge into somebody or we turn the lights out,” Maron said.

Holy Name Medical Center in Teaneck is one of only 11 independent hospitals in New Jersey.

Trinitas Regional Medical Center is also independent. Its vice president of marketing and public relations tells us, Trinitas is “…always evaluating the health care environment and considering the best way to deliver care to our patients.”

That includes affiliated with larger institutions like  St. Joseph’s Regional Medical Center in behavioral health, with JFK Medical Center in stroke treatment and with Newark Beth Israel Medical Center in pediatrics.

The New Jersey Department of Health tells NJTV News high-level care requires significant investments. “Mergers are one approach for making these significant investments while achieving the economies that scale provides.”

But, are the financial benefits passed on to the consumer?

A national report by the Robert Wood Johnson Foundation found, “Hospital consolidation generally results in higher prices… When hospitals merge in already concentrated markets, the price increase can be dramatic, often exceeding 20 percent.”

“The underlying driving force was leverage. Market leverage to negotiate rates,” Maron said.

Maron says the Affordable Care Act changed the landscape for health care providers, especially when it comes to Medicaid expansion. He worries the state — with its budget woes and continuous downgrades — will lower the eligibility threshold once federal incentives run out, leaving many without insurance wherever they go for care.