DOH Commissioner Tapped to Lead Troubled Newark Hospital

Lilo H. Stainton | May 2, 2019 | Health Care
As governor calls news bittersweet, Elnahal promises big improvements at the 130-year-old institution

Credit: Edwin J. Torres/Governor's Office
Commissioner Dr. Shereef Elnahal is moving on from New Jersey's Department of Health to lead University Hospital in Newark.
A robust medication-assisted treatment program to better address Newark’s high rate of substance use disorder. Additional screenings to help community members treat and manage diabetes, hypertension and other chronic diseases. And more effective testing and treatment for cancer.

These goals are part of the vision New Jersey Health Commissioner Dr. Shereef Elnahal has for University Hospital in Newark, a 130-year-old teaching hospital and top trauma center with a unique public mission — and a recent history of financial and operational struggles. And, come mid-July, he will be in a position to see them through.

The hospital’s board of directors voted Wednesday to hire Elnahal as University’s new president and CEO, at a salary to be determined by a process that will include a review of pay at regional public hospitals; he now earns $175,000 in his state role.

The commissioner will replace acting CEO Judy Persichilli, who served as a state-appointed monitor for the troubled hospital before she was chosen to lead the facility in December, following the departure of the embattled former president, John Kastanis; Persichilli earned $300,000 a year, a third of Kastanis’s salary.

Gov. Phil Murphy, who picked Elnahal to head up the Department of Health soon after taking office in January 2018, called the news bittersweet. The state will now conduct a wide, possibly national, search to find another health commissioner, Elnahal said.

Murphy ‘sad to see him leave’

“Over the past year and a half, Shereef has proven again and again that he was the perfect choice for our administration’s first Commissioner of Health,” Murphy said. “Whether it was guiding the state through a troubling viral outbreak, working with the First Lady to tackle maternal health disparities, or ensuring that more patients than ever before will have access to medical marijuana, he has made us proud.”

Credit: NJTV News
University Hospital Newark
“While I am sad to see him leave the Department of Health, I am immensely happy to see him continue his service to the people of New Jersey and some of our most underserved residents at University Hospital,” the governor added.

Elnahal’s appointment also drew praise from lawmakers and leaders at Health Professional and Allied Employees, the state’s largest healthcare union, and the New Jersey Health Care Quality Institute; several also credited Persichilli for her efforts to initiate a turnaround at the hospital.

“It’s been my greatest honor to serve in the Murphy administration,” Elnahal said, noting their efforts to “advance the Governor’s agenda for social justice in health” through restoring women’s healthcare funding, expanding medical marijuana, as well as addressing the opioid epidemic, concerns at the state’s psychiatric hospitals and racial disparities in maternal and infant health.

“It is now my privilege to transition into serving the state’s only public hospital and its community,” he added. “At University Hospital, I pledge to continue my service to New Jersey by executing on a vision that makes it an institution of trust again for its community.”

Interesting challenge

The commissioner conceded that he was surprised when a hospital stakeholder pitched the idea to him last month; the governor had a similar reaction at first, Elnahal said. But, after discussing the possibility with his wife — and receiving Murphy’s blessing — Elnahal said he decided to apply for what he saw as an interesting challenge. (Elnahal was one of three finalists for the job.)

Elnahal has a background in hospital reform, having helped to turn around parts of the federal Veterans Affairs network during his time with the Obama administration. He was also intrigued, he said, by the hospital’s mission to serve Newark citizens, rooted in a 50-year-old statute adopted as the state grew its medical education system.

In addition, as an urban hospital with a diverse patient mix and significant public health challenges — including high rates of opioid addiction, maternal mortality and other issues that have become a focus for the DOH — the work appealed to him, Elnahal said. He had also become familiar with the facility as the department became more involved with it over the past year.

Last summer Elnahal picked Persichilli to review University’s work, which led to a report she released in December that identified deep-seated problems with leadership, communication and long-term planning at the hospital. In November, the department also jumped in to address an infection scare, after inspections found problems with various safety protocols.

Following the vote Wednesday, board chair Tanya Freeman said the leadership team was “delighted” to welcome Elnahal to University Hospital to continue the reform work that has begun. “We are confident that his strong leadership and creativity will be the driving force necessary to continue the momentum we have begun to develop over the last several months as we craft a Strategic Plan for the future,” she said.

“The Board is also deeply grateful to the selfless work of Judy Persichilli during this transition period. She has brought a culture of transparency and gratitude to the leadership team that is felt by our patients, employees, and community,” Freeman added.

University Hospital, a training ground for Rutgers University students in multiple healthcare fields, has 500 beds, but less than 300 are filled most days, according to state reports. It also treats close to 400,000 patients a year through the emergency room or other outpatient programs, serves as the region’s only Level 1 Trauma Center — one of three statewide — and is one of two Garden State hospitals to perform liver transplants.

A strained budget

But Persichilli’s report revealed these critical and costly programs are not easily supported by the hospital’s current revenue stream. It has an annual budget of $670 million — more than $140 million of which is slated to come from the state this year, a mix of state and federal funding designated for hospitals and state dollars to support education programs — and employs 3,300 workers, most of whom are funded through state programs. It also has a significant pension liability and a poor credit rating, she found.

Under its previous leadership, University sought to cut costs early last year by reducing the number of pediatric emergency beds, a move that triggered concern among healthcare unions and community members. The hospital’s actions, along with its financial troubles and low marks from national quality monitors prompted Murphy’s call in August for outside oversight, a move that resulted in Persichilli’s hiring.

Another concern is that University Hospital’s patient base is largely made up of the poorest residents of Newark, Elnahal said, many of whom have significant healthcare needs. State records show that only one-third of those treated at the hospital have commercial insurance, nearly half are covered by Medicaid (which rarely pays the full cost), and others have no health insurance at all; no other hospital in New Jersey faces the same challenging ratios.

While University already receives a greater level of public support than other hospitals — $32 million more than any other facility in state hospital aid alone — officials there have requested nearly $25 million in additional state funding for the 2020 fiscal year. Their request included another $10 million for treating uninsured patients and $15 million to help rebuild the emergency room, which Persichilli’s report flagged as overcrowded and in need of investment.

Murphy did not include these expenditures in his initial proposal for fiscal year 2020, which starts in July, and Elnahal recused himself from a public discussion on the request last month, since he was already under consideration for the job. But several Democratic leaders have expressed their support for the additional funds.

Calls for infrastructure improvements

“We’re in critical need of infrastructure improvements, especially to the emergency room,” said Sen. M. Teresa Ruiz (D-Essex) at a budget hearing in late April. “Certainly we don’t want to see the physical construction of the emergency room interfere with the ability to access care,” she added. “It is a state facility and it should be supported properly.”

Ruiz, who represents Newark, was also among the first to publicly congratulate Elnahal on the news. “Since his time in the Department of Health, he has displayed a keen understanding of how to best approach the health issues and crises that are plaguing our state,” she said, praising his dedication to addressing issues like infant mortality and opioid addiction.

“He has a wealth of experience and an undeniable passion for public health which will be incredibly valuable in his new role. University Hospital is critical to Newark as well as the entire region and I am confident he will be able to bring the hospital to new heights,” Ruiz said.

Elnahal echoed her enthusiasm for the facility in his own comments. “University Hospital can be the pride of Newark. Its health care, community, and academic missions can carry it forward into excellence,” he said. “That is my promise to patients, employees, and the surrounding community.”