Coalition Makes Case for State Attaching Strings to St. Mary’s Hospital Sale

Andrew Kitchenman | January 15, 2014 | Health Care
Unions part ways over whether NJ should require monitor for-profit hospital manager Prime Healthcare

St. Mary's Hospital in Passaic.
Prime Healthcare Services’ yearlong effort to buy St. Mary’s Hospital in Passaic is entering its endgame, as a coalition of opponents to the deal argue that it will put the community, patients and healthcare workers at risk if the state doesn’t attach more strings to the deal.

This coalition, which includes unions that represent workers at other hospitals as well as healthcare advocates and community activists, alleges that the core of Prime’s business model – turning struggling nonprofit facilities into profit makers – is based on dangerous tactics that only a bevy of state requirements and a state-appointed monitor can combat.

But Prime has gained a key ally – JNESO, the union that represents nurses and other healthcare workers at St. Mary’s, has already reached a contract agreement with Prime pending completion of the sale.

The process will come to a head over the next two nights, as the state Department of Health holds a pair of legally required public hearings at Passaic High School, during which opponents and supporters of Prime are expected to make their case.

The outcome will have ramifications for not only the St. Mary’s sale, but also for Prime’s bids for Saint Michael’s Medical Center in Newark and the three Morris County hospitals operated by Saint Clare’s Health System.

India Hayes Larrier , an organizer for nonprofit coalition member New Jersey Citizen Action, said in a telephone press conference yesterday that Prime has a history of putting profits ahead of the interests of communities and patient care.

The coalition is demanding a series of measures it wants the state to require if it approves the hospital’s transfer of ownership. They include keeping St. Mary’s as an acute-care facility, requiring that it maintain outpatient and clinical services, and mandating that St. Mary’s maintain in-network status with insurers.

The coalition members said the state must also require Prime to address the health needs of the local community, which a survey determined to include treating patients with hypertension, asthma, diabetes and depression, as well as other mental illness and substance-abuse issues.

In addition, the coalition wants a state monitor to ensure access to care and to prevent the hospital from shifting costs to consumers and other providers, weakening its quality and diminishing the standard of living for its healthcare workforce.

The participation in the coalition by the Health Professionals and Allied Employees, a union that represents workers at other hospitals but not at St. Mary’s, has incensed JNESO Executive Director Virginia Treacy.

“To place unrealistic restrictions on a new buyer will make (the sale) untenable,” Treacy said.

Treacy said that both JNESO and Prime agree with most of the coalition’s goals, including that St. Mary’s continues as a full-service hospital that meets the needs of the community. But JNESO opposes having a state financial monitor.

Treacy noted that the HPAE represents workers at other New Jersey hospitals operated by for-profit owners and that only one of them has a monitor – Meadowlands Hospital Medical Center.

“I find it absolutely hypocritical that HPAE has had for-profit buyers in so many different facilities and comes into a hospital (objecting to a sale) where they represent no one,” Treacy said.

She also opposed the coalition’s demand that St. Mary’s join all insurers’ networks. She argued that every hospital in the state must be able to negotiate contracts with insurers, with the ability to remain out-of-network if an insurer isn’t willing to bargain.

Prime has been in a long-running dispute with the Service Employees International Union in California. SEIU executive board member Stephanie Allen said that based on her experience as a respiratory therapist at Centinela Hospital Medical Center in Los Angeles, St. Mary’s patients can expect reduced services, staff layoffs, increased use of expensive testing and cancelled insurance contracts.

Nelly Celi of the Peruvian American Coalition in Passaic, expressed a fear that St. Mary’s would ultimately be reduced to a shell, with an emergency department shifting patients to out-of-town hospitals that are inaccessible to patients’ families.

“It is not enough to have a hospital that does not care about the day-to-day healthcare needs of our community,” Celi said.

Renee Steinhagen, executive director of New Jersey Appleseed Public Interest Law Center, said St. Mary’s governing board has a track record that’s “blatantly” not in the hospital’s best interest. She cited reports that Prime will only pay off $15 million of the $40 million bond that the state provided the hospital, leaving taxpayers to pay the other $25 million.

She expressed doubt that the hospital board fully explored a nonprofit purchaser before reaching its agreement with Prime. She said that in order to fulfill its fiduciary duty, Prime must appoint a locally based corporate board, not just an advisory panel, and pay for a state monitor for three years.

“We have to ensure that this facility remains a community hospital,” Steinhagen said.

Prime officials responded to the concerns with an emailed statement.

“Prime Healthcare Services is committed to St. Mary’s Hospital, its employees and the greater Passaic community,” wrote Luis Leon, Prime’s president of operations. “We welcome the state of New Jersey’s thorough review process and look forward to the public hearings, which will allow community members to make their voices heard. We remain confident that this fair and open process will ultimately lead to St. Mary’s joining the Prime Healthcare family. Prime Healthcare’s goal is to make St. Mary’s one of the best hospitals in New Jersey.”