September 27, 2008
Rival Hospitals Dispute Need to Reopen Pascack
By MARY JO LAYTON and LINDY WASHBURN, STAFF WRITERS
Bergen County doesn't need another hospital and adding one will seriously harm existing hospitals in the area, according to a report commissioned by The Valley Hospital and Englewood Hospital and Medical Center.
"It will do us harm," said Douglas Duchak, Englewood's president and chief executive officer.
Reopening Pascack "will weaken the other hospitals," said Audrey Meyers, president and chief executive officer of Valley. "It makes no sense."
It's the first time competing hospitals have teamed up to block the expansion of Hackensack, which has grown to dominate the local market. Next month, Duchak and his team will make their case before state Health Commissioner Heather Howard. Valley officials will attend a separate meeting. In the meantime, the hospitals are taking their opposition public with a Web site launched Thursday that invites people to sign an online petition against the reopening.
"We're going to be aggressive," said Robin Goldfisher, vice president of legal affairs at Valley.
The report commissioned by the two hospitals found that other hospitals sufficiently absorbed the patients when Pascack Valley went bankrupt and closed in November. The closure "strengthened the existing hospitals without harming access [to care] in any significant way," said David Bender, vice president of The Lewin Group, the Washington, D.C.-based firm that conducted the study. "This region has been given a bit of a gift."
It is the second report this year to conclude that North Jersey has too many hospital beds. In January, Governor Corzine's own blue- ribbon commission said Bergen and Passaic counties could lose one or two hospitals without affecting patient care. Excess capacity drives up health care costs for everyone and helps make the state's health insurance premiums among the highest in the nation, the report said.
Hackensack bought the Westwood hospital in partnership with Touro University for $45 million at a bankruptcy auction in February. A private equity firm, the Texas-based Legacy Hospital Partners, has committed to invest $80 million in the renovation, and would run the facility. Hackensack would remain a minority owner.
On Wednesday, Hackensack will reopen the emergency room in Westwood, a plan local hospitals haven't objected to.
But the "certificate of need" application Hackensack filed with the state Health Department to open "Hackensack University Medical Center North at Pascack Valley," now looms as a major battle in politics, policy and public opinion. Residents in the area are clamoring for the reopening - 7,000 have signed an online petition so far.
Englewood and Valley executives cite the former health commissioner's own words in opposing Pascack's reopening: "I believe that the existing area hospitals have sufficient bed capacity to meet the continuing needs of the population," then-Health Commissioner Fred M. Jacobs wrote last year when Pascack closed.
Two lawmakers, including a member of the state Senate Health Committee, have joined Englewood and Valley in opposing Pascack's reopening.
"Granting this approval ... would represent irrational health policy," state Sen. Loretta Weinberg, D-Teaneck, and Assemblyman Gordon M. Johnson, D-Englewood, wrote in a letter to Howard.
"These closures have not been easy, but as your administration has rightly argued, the reduction of excess hospital bed capacity is a necessary part of health care reform."
Hackensack's executives dismissed opposition to their proposal, while noting that it was "unprecedented" to commission a private report. "Of course the report will come out the way they want it," Hackensack President John Ferguson said Thursday.
Jacobs did not terminate the hospital's license, but allowed 24 months for its reactivation, noted Robin Ratliff, Hackensack's vice president for planning. "If the state had wanted the hospital to close, they would not have held the license open for two years," Ratliff said.
Ratliff said more hospital beds are needed in the region. The state report -- the New Jersey Commission on Rationalizing Health Care Resources -- used data on hospital capacity that do not reflect recent closings in Bergen and Passaic counties that took nearly 700 beds out of circulation, Ratliff said.
Hackensack's plan has been embraced by community leaders in the Pascack Valley and Northern Valley towns, and endorsed by that district's legislators, including state Sen. Gerald Cardinale, R- Cresskill.
"I find it very unfortunate that Englewood and Valley who are in the business of providing health care services have made this into a business situation," said Westwood Mayor John Birkner. "This is more than business. This is a matter of providing quality accessible health care for area residents."
Cardinale said that state officials will likely view the proposal favorably since it involves no state financing. He said that Howard assured him the state "would do everything possible to expedite the granting of the CN [certificate of need]."
A spokeswoman for the commissioner said the department does not comment on pending applications.
But Englewood and Valley officials argue that approving Hackensack's plan will mean future problems for those served by the area's other hospitals.
Englewood lost $15 million in the three years before Pascack Valley closed, but went from a negative operating margin of 2.8 percent in 2006 to a positive margin of 2.2 percent in the first six months of this year. It added employees and opened new beds. But of its 540 licensed beds, half still go empty.
"I don't think it puts us out of business" if Pascack Valley reopens, said Tony Orlando, Englewood's chief financial officer. "But it makes us inefficient. It's very hard to cut those costs."
Valley is experiencing the biggest bump in patients from the Pascack Valley service area -- nearly 3,000 more patients a year. Valley stands to lose $8.3 million to $18.5 million annually if an acute-care center reopens in Westwood, the Lewin report concluded.
Hackensack has projected turning a profit within three years in Westwood, which means that it will not only recover patients it once served, it will take away patients that would have gone elsewhere, Orlando said.
The fact that this would be a for-profit facility is causing even more angst, especially when local hospitals are seeing dramatic increases in charity care and less funding from the state.
"They put profit before patients," Duchak said.
(c) 2008 Record, The; Bergen County, N.J.. Provided by ProQuest LLC. All rights Reserved.