State Monitor Identifies Major Leadership, Planning Problems at Newark Hospital

Troubling findings on operations, finances, quality of care at state’s only public acute-care facility

Credit: NJTV News Online
University Hospital
Sometime this spring, months before four premature infants — three of whom have since died — were reported to have contracted a bacterial infection while in the neonatal intensive care unit at University Hospital, the same bacteria was making the rounds of a separate critical care ward.

It’s not clear if the leadership team at the struggling Newark hospital knew about the initial outbreak, responded properly, or if anyone involved reported the diagnosis to local health officials, who are required to inform the state.

These are among the troubling findings contained in a report released Monday. The report is by a hospital expert tapped last summer by the Department of Health to review the finances, operations, and quality of care at University Hospital, the state’s only public acute-care facility and a source of growing concern for state regulators and healthcare experts. (The DOH was alerted to the neonatal Acinetobacter baumannii bacterial infections in October and is now investigating how the hospital handled communication concerning the incident.)

Judy Persichilli, appointed by the state to monitor the hospital is the report’s author. She identified a range of problems at University Hospital, including a lack of strong and visionary leadership, no strategic plan, poor internal accountability and communication, and limited board oversight. Hospital president and CEO John Kastanis announced last week that he will step down on Friday. The board is now looking for a replacement to “lead transformation” at the hospital, according to chair Tanya Freeman, and will appoint someone to oversee operations in the interim.

Judy Persichilli has been appointed acting president and CEO of University Hospital.
“As University Hospital transitions to new leadership, we are focused on ensuring the hospital takes the steps needed to provide the highest quality care for the residents of Newark and Northern New Jersey. We know there is work to do in building a culture of quality and safety, and we will be working closely with state leaders to address the issues identified in the report immediately,” the board said in a statement.

Major budgetary concerns

Persichilli’s report also suggested the hospital faces major budgetary concerns — which state officials declined to elaborate on late Monday — and may need to use up to $7 million in unanticipated funding designed for quality improvement to instead cover a deficit in the current fiscal year. It also outlined staff changes and spending reforms that could save nearly $30 million more. The hospital is slated to receive more than $150 million in state funding this year for wages, medical education programs, and to offset the cost of treating uninsured patients, according to the state.

In addition, Persichilli found that University Hospital failed to effectively engage and support the Newark community, despite a 50-year-old agreement with the city to ensure access to “essential healthcare services.” In addition, the 2012 law that dismantled the former University of Medicine and Dentistry of New Jersey, which previously ran the facility, had declared the hospital’s operation “necessary for the welfare and health” of New Jersey residents.

“It has been five years since the separation (from UMDNJ) and University Hospital has not leveraged its unique position to focus on developing a culture of high performance. There are multiple reasons why a hospital fails in areas of quality and financial performance, but common themes do emerge,” Persichilli wrote. “As the State’s only public hospital University Hospital is an indispensable asset to the vulnerable populations of Newark and the surrounding community.”

University Hospital is licensed for nearly 470 beds, employs some 3,300 full-time staff, and has an annual budget of $670 million, according to the report. It cares for some 17,000 inpatients each year, treats 80,000 people through the emergency room — one of the state’s busiest — and serves more than three times as many on an outpatient basis.

The facility serves a poor population with many health needs, a challenge familiar to many urban hospitals. According to the DOH, only one-third of University Hospital’s patients have commercial insurance; the bulk are covered by Medicaid or are uninsured — one of the lowest rates of coverage for any hospital in the state. It also operates one of the state’s three Level 1 Trauma Centers and is one of two hospitals to perform liver transplants, both costly programs.

Vitale: Hospital ‘is too important to let it languish’

“This report illustrates just how much work must be done to improve all areas of critical care and the leadership required to advance it. University Hospital is too important to allow it to languish in what is even less than mediocrity,” said Sen. Joe Vitale (D-Middlesex), chair of the health committee, who has been monitoring events there.

Credit: Screenshot: NJTV
University Hospital president and CEO John Kastanis is stepping down this week.
The hospital has struggled financially and with maintaining care quality over the years. It received a failing grade on the hospital safety report issued by the Leapfrog Group in March (since upped to a “D” grade) and had sought to eliminate certain pediatric services, without state permission. A June board vote to grant Kastanis a three-year, $900,000 annual salary deal and a four-level downgrade of the hospital’s bond rating in July prompted Gov. Phil Murphy to call for the appointment of the monitor.

Then came the deadly outbreaks. As the DOH was battling viral outbreaks at two pediatric long-term care facilities, including one at the Wanaque Center for Nursing and Rehabilitation that has infected 34 individuals and contributed to the death of 11 medically fragile youth, an inspection team also identified “major infection control deficiencies” at University Hospital, and called on it to immediately hire an outside inspection expert to help protect patients. (Both the bacteria and virus involved are not considered a public threat, but can be deadly to those with compromised immune systems.)

In her report, Persichilli notes that multiple studies have emphasized the critical role leadership plays in achieving and maintaining high quality care and ensuring patient safety. While efforts were made by front-line clinical staff to address gaps in infection control or other aspects of care, she said these reforms were not adopted by management for use throughout the facility, or effectively supported by those at the top.

“As with several areas at UH, there are well-intentioned individuals with expertise and skills that are doing the everyday work, but issues and concerns are not being relayed throughout the organization and most importantly up to leadership. A culture of quality requires a line of sight to leadership and the Board for effective practices to be instituted and recognized,” she wrote.

What Persichilli recommends

DOH Commissioner Dr. Shereef Elnahal, who is eager for successful reform at the facility, said Monday, “I want to see the state’s only public hospital succeed for the patients who need care, for the broader community in Newark and for the frontline clinicians and employees who strive to provide the highest quality care every day.”

To address the gaps identified, Persichilli recommends the hospital beef up oversight mechanisms. She urged it to recommit to engaging an effective Community Oversight Board — a group required by the 2012 law but that has played a limited role so far — and that it do more to educate and involve the 11-member Board of Directors, which she said hasn’t been given the tools and skills to hold the hospital accountable.

To improve patient outcomes, the report urges administrators to work together to create a culture focused on patient safety and positive outcomes. Clinicians need to be rigorous about reporting, data must be accurate, and they should hold daily huddles to review concerns or protocol changes — something common in most hospitals, but not at University Hospital, Persichilli found. Quality measures must be reported to the board regularly, in formats that make it easy to assess progress or identify problems, she wrote, and the organization should set goals — like reaching an A or B on the Leapfrog report within two years.

In addition, University Hospital needs to expand the capacity of its emergency room, she noted, urging administrators to hire a consultant to help it navigate these changes. The facility is overcrowded — some patients wait up to 15 hours — and in need of more staff, especially psychiatric experts. One option, Persichilli noted, was for the hospital to open its own urgent-care office to divert patients with less critical medical issues and relieve pressure on the ER.

Persichilli also outlined options to reduce costs — like eliminating up to 100 positions — and urged leaders to renegotiate contracts for the clinical staff, which has increased by more than one-third in five years. But none of these changes will succeed without the addition of a “transformational leader focused on creating a vision and building teams to execute the changes necessary to be a high performing organization,” she wrote, and adopting a strategic plan for the institution. Leaders also need to work more cooperatively with the DOH.

“Strong and effective leadership is critical for strengthening the quality, safety and financial performance of a hospital,” the report notes. “Without a shared vision and a strategic plan that focuses the team on its shared accountability for future success and improvements for quality and financial results, the team is working in a vacuum and in disparate silos.”

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