Hackensack University Medical Center got a green light Tuesday from a state regulatory panel to reopen Pascack Valley Hospital in Westwood. Now the matter goes to State Health Commissioner Mary E. O'Dowd, who is expected to rule by year end—but her decision isn't expected to settle things. Englewood Hospital and Medical Center and Ridgewood's Valley Hospital are fighting the Pascack Valley reopening on the grounds that it will siphon off patients and weaken them financially. The two hospitals have said they will go to court if, as they expect, O'Dowd follows the recommendation of the state Health Planning Board and approves HUMC's plan to open a 128-bed hospital in partnership with the Texas-based for-profit hospital developer LHP Hospital Group. LHP has committed nearly $40 million to renovate Pascack Valley, which went bankrupt and closed in 2007.
HUMC and its opponents disagree on the most fundamental issue: whether or not there is a shortage of hospital beds in Bergen County that warrants reopening Pascack Valley. A staff report by the health planning board said 83 percent occupancy is considered "full occupancy," because it allows for unpredictable spikes in demand for hospital beds. And according to the report, if HUMC had not increased its bed capacity in 2007, its occupancy would have jumped to 93.29 percent in 2008 "and would have remained around 90 percent in subsequent years." HUMC has estimated it would have about 8,000 admissions a year at the new hospital, to be called HackensackUMC at Pascack Valley. Right now, HUMC operates a satellite emergency department there, and plans to open the renovated acute care hospital in 2012, with about a quarter of its admissions coming from the overflow from its Hackensack campus and the rest from the 14 Bergen County towns that used to use Pascack Valley, as well as from nearby Rockland County in New York.
Douglas Duchak, CEO of Englewood Hospital, said O'Dowd's decision should be based on whether there are sufficient hospital beds throughout Bergen County.
"There is plenty of capacity," according to Michael Pietrowicz, senior vice president for planning at Englewood. His hospital is licensed for 520 beds, but maintains and staffs 300, he said, adding that both Valley and Hackensack have a higher patient occupancy rate than Englewood. But he argued that if all three hospitals are viewed as a group, there are excess beds. And he said hospital admissions have been declining overall in Bergen County. According to the planning board's staff report, total hospital admissions at all Bergen County hospitals declined from 133,823 in 2006 to an estimated 133,186 for 2011.
Robert Garrett, CEO of HUMC, said three hospitals have closed in Bergen County in the past four years, removing 700 hospital beds "and what was an excess of beds has become a shortage of beds." The planning board report cited a prediction by the state Department of Labor that the over-65 population in the county will increase by 37.7 percent from 2008 to 2028, which the report said supports the need for Pascack Valley.
Asked if he favors competition among hospitals, rather than seeking to meet Bergen County's needs through a regional approach, Garrett said "If you look at any industry, competition has raised the bar for quality. Having said that, hospitals getting together in a collaborative way can also make for more efficient care. The best of all worlds is to have competition out there in terms of hospital systems, but also forming consortiums wherever possible."
More than 200 people, many of them voicing their wish to reopen Pascack Valley, packed yesterday's hearing in East Windsor; the crowd included members of the state legislature, mayors, doctors, and Bergen County residents. The board also heard from local ambulance squad members, who said they face heavy traffic on slow two-lane roads when driving patients from the Pascack Valley area to Hackensack, Englewood, and Valley. Although HUMC operates a satellite emergency department at Pascack Valley, since there is currently no acute care hospital, ambulance squads cannot take a patient there if the patient is likely to need surgery or be admitted to a hospital.
The hospitals in Bergen County are known to compete fiercely for doctors and for patients. But Duchak said "this is a regulated industry. Free market capitalism doesn't work in New Jersey hospitals; this isn't about competition, this is about regulation."
Pietrowicz said Hackensack must get a certificate of need from the state to reopen Pascack Valley and "the CN process is supposed to make sure that healthcare resources are adequately provided and the communities are taken care of." James Hirschhorn, an attorney for Sills Cummis & Gross who represents Englewood, said "the purpose of the CN process as it now exists is partially to stabilize the hospital market." He said the closure of about 20 hospitals in New Jersey over the past two decades reflected the declining demand for hospitals beds throughout the state, despite a rising population, as more medical care was provided on an outpatient basis and more than 200 ambulatory surgery centers opened to perform procedures once only done in hospitals.
Duchak said hospitals advertise heavily for patients: "this is a marketplace where we are trying to attract patients. It is still very much a market driven industry -- but the problem is it can't be [a free market]. If we opened up a hospital everywhere in New Jersey that is 15 minutes from a hospital, how many hospitals would there be in New Jersey? The state's responsibility is to make sure there is a reasonable balance. You can't have a hospital on every corner."