Opponents of Hospital Sale to For-Profit Chain Want State to Add Stipulations

Andrew Kitchenman | November 13, 2014 | Health Care
Newark mayor joins effort to block takeover of Saint Michael’s Medical Center by Prime Healthcare, seek new bidders

Credit: (Anthony Alvarez/Newark Press Information Office)
Newark Mayor Ras Baraka
Opponents of the sale of Saint Michael’s Medical Center in Newark to a for-profit California-based chain are asking the state to consider whether the prospective owners have a long-term commitment to to meeting the city’s healthcare needs.

State officials have been reviewing the proposed sale, which comes on the heels of state approval for the separate sale of St. Mary’s Hospital in Passaic to Prime Healthcare, the same company seeking to buy Saint Michael’s.

Sale opponents want the state to require that the buyer of Saint Michael’s commit to keeping the hospital open longer than the five-year commitment from Prime. In addition, they want the state to mandate that the buyer remain in health insurers’ provider networks and agree to cooperate closely with the city’s other hospitals — Newark Beth Israel Medical Center and University Hospital.

Prime spokesman Edward Barrera responded in a statement that the company is committed to saving Saint Michael’s and preserving critical healthcare services to meet city residents’ needs. He added that the hospital would likely close or be a shell of itself, leading to the loss of well-paying jobs, if the sale opponents get their way.

Barrera said Prime has never closed a hospital or hospital department and is committed to keeping Saint Michael’s open for 10 years or more. Prime also would retain “substantially all employees and commit to maintaining staffing levels necessary to ensure safe patient care,” Barrera said.

Newark Mayor Ras Baraka joined the opposition to Prime yesterday at a press conference asking the state Department of Health and state Office of the Attorney General to make the requested requirements part of the sale conditions.

The future role of each of Newark’s hospitals, as well as Clara Maas Medical Center in Belleville and East Orange General Hospital, will be analyzed in a state report due at the end of this week. The report by consultant Navigant was commissioned by the New Jersey Health Care Facilities Financing Authority.

It may recommend consolidation or regionalization of services if Navigant finds there is duplication or overcapacity. Alternately, the report could recommend expansion of services if current healthcare offerings in the city are deemed inadequate..

Baraka said Newark officials are deeply concerned by the agreement between Saint Michael’s owner CHE Trinity Health and Prime. He wants assurances that the level of services offered at the hospital will be maintained, that staff won’t be laid off “wholesale” or arbitrarily, and that the state will consider the Navigant report before moving forward with the sale.

“Newark is undergoing a serious transformation on all levels and healthcare is not exempt from that,” Baraka said. “And we want to make sure we are delivering the best services to the residents in and around the Newark area given the hospitals we have. We cannot afford to close down another institution.”

The mayor added that hospital services should be determined by the city’s needs “and not one individual’s attempt to make money off of a failing system in this city.” He didn’t identify the individual.

Barrera said Prime executives want to meet with Baraka.

“It’s unfortunate that Newark Mayor Ras Baraka has taken a position against the sale without even meeting with any Prime representative,” he said in a statement. “We agree with Mayor Baraka in that Newark cannot afford to have another hospital close.”

Barrera said Prime would maintain all services Saint Michael’s currently offers and “maintain in-network status with managed care health plans.” He said the company has already invested $15 million in St. Mary’s and committed to an additional $30 million in equipment upgrades and capital improvements.

He said the company’s hospitals have done well in quality ratings — opponents point to other ratings where it hasn’t scored as well — and have a track record of serving low-income residents in California.

“In other words, the opposition to this transaction is not about the medicine; it is about politics,” he said.

India R. Hayes Larrier, spokeswoman for the hospital-sale opposition group Campaign to Protect Community Healthcare and an organizer with New Jersey Citizen Action, said the state should require a “do over” in the negotiations to sell Saint Michael’s. She said the deal would saddle the state with $190 million in hospital debt to be paid by taxpayers and added that she expects the Navigant report to “uphold” the opponents’ position. She added that the group gathered nearly 1,000 signatures demanding that the hospital reopen bidding.

While Essex County freeholders Rolando Bobadilla and Rufus I. Johnson and members of the Service Employees International Union joined Baraka yesterday at the press conference opposing the sale, the transaction has drawn support from Newark City Council members, as well as from the largest unions representing Saint Michael’s workers — JNESO and the American Federation of State County and Municipal Employees Local 1199J.

Bobadilla said, “Healthcare is a fundamental right, not a for-profit privilege.”

Dr. Ahmad Yousaf, a medical resident at University Hospital and a member of the Committee of Interns and Residents union – an SEIU affiliate — said he’s concerned that Prime would be a competitor, not a partner, with University and Newark Beth Israel. He added that he was concerned that Prime would rely on an “out-of-network business model” based on the company’s practices in California.

Yousaf said he was concerned that if Prime runs Saint Michael’s, it would lead to a greater burden of uninsured patients being care for at University.

Hayes Larrier said her group isn’t opposed to all for-profits, but is opposed to any that won’t meet the requirements being demanded.

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