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Troubled Newark Hospital Selects Current Monitor As Acting President And CEO

Judy Persichilli, an executive with a national hospital system, had just issued her report, identifying deep-seated problems with leadership, communications and long-term planning

Judy Persichilli
Judy Persichilli has been appointed acting president and CEO of University Hospital.

The board of embattled University Hospital has tapped the author of a report critical of its operations to guide the Newark facility while it seeks to regroup, address key shortcomings, and develop a real strategic plan.

At a special meeting held yesterday, the Board of Directors at University Hospital appointed longtime nurse and industry executive Judy Persichilli as acting president and CEO, expressing confidence in her ability to help turn around the struggling facility. The group announced it is also launching a strategic planning process to “drive the future of the Hospital.”

The decision came just days after Persichilli — who was appointed by the state last summer to monitor University Hospital — released findings that identified deep-seated problems with leadership, communications and long-term planning at the facility.

It also came a week after current president and CEO John Kastanis announced that he would step down, effective today. Persichilli will be paid $300,000 a year, according to the hospital, a third of the salary Kastanis reportedly negotiated as part of a contract deal approved earlier this year.

The roughly 500-bed facility, a major teaching hospital for Rutgers University and one of three Level 1 Trauma Centers in New Jersey, has been under extra scrutiny since October, when state officials were alerted to a bacterial infection that had sickened four premature infants in the hospital’s neonatal intensive care unit, three of whom eventually died. It was also the only acute-care facility in New Jersey, and one of just 30 nationwide, to receive a failing grade in a spring report from the Leapfrog Group, a nonprofit watchdog, which has since raised University Hospital’s score to a D in their fall report.

Persichilli — who was the head of St. Francis Medical Center in Trenton for eight years before becoming an executive with CHE Trinity Health, a national Catholic hospital system — said she was impressed by the dedication she saw among employees throughout the organization during her time as the University Hospital monitor.

Praise for the incoming leader

University Hospital Newark
Credit: UHNJ

“I look forward to continuing to work with the entire team and the Board on the journey to becoming a high reliability organization with a unified focus on quality and safety, and to identifying a leader who can work with the community to maximize University Hospital’s potential as both an important public institution and a world-class academic medical center,” she said in a statement released through the board.

State Department of Health Commissioner Dr. Shereef Elnahal — who in July picked Persichilli to probe the hospital’s clinical performance, financial stability and community service — also welcomed her selection as acting CEO. Elnahal’s action was triggered by an executive order signed by Gov. Phil Murphy expressing concerns about the hospital’s bond rating and budgeting, efforts to scale back certain clinical services, and quality of care.

“I am very encouraged by the board’s selection” of Persichilli, the commissioner said. “She not only brings a wealth of experience and a track record of success; she has worked diligently with hospital staff, leadership, and unions over the past several months to build a road map for meaningful improvement at the hospital.”

State Sen. Joe Vitale (D-Middlesex), the longtime chair of the health committee in the upper house who has been tracking the hospital’s situation, also commended the board on its choice. He noted Persichilli has proven herself as a leader during her time with CHE Trinity Health, which operates more than 90 hospitals in nearly two dozen states.

“I am confident she will establish the guiding principles and actions needed to improve and elevate University Hospital as the hospital seeks a similarly qualified permanent successor,” he said.

Failures date back to promises made long ago

With roots in Newark that date back some 130 years, the hospital was declared an “essential healthcare service” for the city’s community as part of an agreement struck five decades ago in the wake of riots in the city, caused in part by the plan to develop a new medical education complex as part of a massive urban renewal project. When that entity, the University of Medicine and Dentistry of New Jersey, was dismantled in 2012, the reform plan declared that University Hospital remained “necessary for the welfare and health” of state residents and certain levels of state support were promised.

Among other things, Persichilli’s report said University Hospital has failed to live up to these promises and urged the hospital to do more to engage the Newark community, including by expanding public-health services and forming new partnerships with local organizations. This has also been a concern for local leaders, including Newark Mayor Ras Baraka and state Sen. Ron Rice (D-Essex), who represents the city.

sen. ron rice
Credit: NewsWorks.org
Sen. Ron Rice (D-Essex)

“This was a long overdue change to the leadership,” Rice said. He hopes hospital leaders will re-establish open communication with elected officials representing the city, something he said has been missing in recent years, and for the facility to create a community advisory panel, as required in the 2012 legislation. As a delegation, Newark leaders “could help build capacity and help get things right” at the facility, Rice said.

The hospital now has a $670-million annual budget, some 22 percent of which comes directly from state funding, according to Persichilli’s report. That money goes for staff salaries, medical education and to offset the cost of caring for uninsured patients, who make up a significant percentage of those seeking treatment.

The hospital employs 3,300 full-time workers, requiring negotiations with seven labor unions. It also has ties with Rutgers University and RWJBarnabas, the massive healthcare system that joined with University Hospital in 2017 to help it beef up research capacity, medical education programs and clinical care outcomes. Those two entities now oversee the work of many of the doctors and other clinicians serving University Hospital.

In her report, Persichilli said University Hospital needs a transformational leader who can “create a vision and build teams to execute the changes necessary,” as well as a strategic plan that articulates a path to achieve these shared goals. She also called for an organizational culture focused on excellence and quality care, where clinical staff regularly reviews protocols and errors, and teams communicate and share results throughout the organization. A stronger, more informed and engaged board is also needed to oversee these changes and hold hospital leaders accountable, she said.

Tanya Freeman
Credit: Tanyafreemanesq.com
Tanya Freeman

Tanya Freeman, University Hospital’s board chair, called Persichilli “the optimal leader to begin implementing these recommendations,” based on their work together in recent months. “University Hospital is a vital public institution and we are confident that Judy will lead the organization in this new role toward delivering on its promise of access to high quality care for the City of Newark and surrounding communities,” she said.

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