NJ Reviewing Sale of the Hospital
Following years of financial struggle, St. Michael’s Medical Center of Newark, New Jersey filed for Chapter 11 bankruptcy protection on August 10, 2015. Officials at the hospital cited an unnecessary delay in reaching a decision on whether to approve the sale of St. Michael’s to Prime Healthcare Services, a hospital network based out of California.
The State of New Jersey was handed the task of making the decision over two and a half years earlier. “The state remains committed to the health and well-being of Newark residents,” said Donna Leusner, spokeswoman for the N.J.Department of Health. “The department has taken a reasonable and deliberative approach, as it always does, with certificate of need applications. Having completed multiple rounds of questions, it remains under review.”
The hospital executives have been losing patience during this drawn out process. The New Jersey Department of Health declined to give a set date for when the review of St Michael’s would be concluded
“We’ve done everything the state has asked us to do,” said St. Michael’s Medical Center CEO David Ricci. “After two and a half years, it would appear we’re no further along than when we started.”
Bankruptcy is Best for the Hospital
By filing for bankruptcy protection, the hospital will be able to temporarily avoid having to pay some of its debts and bills. This will allow St. Michael’s Medical Center to continue functioning until the sale to Prime Healthcare is approved.
Ricci was quick to point out that none of the hospital employees will be affected by the hospital’s decision to file for bankruptcy protection.
“Their jobs are preserved,”said Ricci of the facility’s 1,400 employees. “Their benefits will continue and their salary will continue to be paid.”
Hospital’s Quality Rated as Poor
In the previous couple of years, St. Michael’s Medical Center had received low grades when rating the quality of their healthcare. In 2012, they got a “B” rating, and the latest grading gave the hospital a “D”.
“This is a hospital that is in serious financial difficulty and has serious quality problems,” said David Knowlton of the New Jersey Health Care Quality Institute. “It has received low grades on basic things, like its rate of hospital-acquired infections and prevention of bed sores.”
Hospital Has Been run By Non-Profit Until Now
St. Michael’s Medical Center is a Catholic hospital that maintains 130 beds, and has been run by the Franciscan Sisters of the Poor Charity Foundation since the hospital’s opening in 1867. It has prided itself on refraining from putting any priority regarding patients that they accept, including race or income level.
In contrast to the hospital’s operation during the past century and a half, Prime Healthcare Services, the potential buyer of the facility, is a for-profit company where guidelines as to which patients they provide service are likely. This has led several public officials to be opposed to the sale of the hospital to Prime.Opponents say that patients who can’t afford higher fees are likely to abstain from seeking the medical attention they require.