Bettering Plainfield with the facts since 2005

Friday, November 16, 2007

Muhlenberg Hospital Sale: A Blessing in Disguise?

Plainfield crackled with the news Thursday afternoon that Solaris Health Systems was putting Muhlenburg Hospital on the block.

While the news shocked many and dismayed some, it may actually be a blessing in disguise.

When Solaris was formed in 1997 by joining Plainfield's Muhlenberg and JFK of Edison, it was seen by many observers as a shotgun marriage. Hospitals had been going through a period of change from the 1980s, leading to many consolidations as an effort to pool resources and manage ever-increasing costs.

From the outset, Solaris was dominated by the larger JFK enterprise, and Plainfield nerves frayed as it became clear that Solaris seemed clueless as to the realities of running an urban hospital.

In addition, Plainfielders' resentment has simmered beneath the surface at perceptions that --
  • Muhlenberg was stripped of resources to bolster JKF (which has its own financial problems);
  • Strengthening the physician base was skewed toward JFK and away from Muhlenberg; and
  • Marketing Muhlenberg in an increasingly competitive healthcare scenario was not a high priority in Solaris' public relations mix.
Missteps have included the brouhaha over relocating the Mercy 6 Cardiac response ambulances away from Muhlenberg and, most recently, moving the heart rehab unit from Muhlenberg to JFK -- both of which moves were eventually rescinded after sharp reactions from the Plainfield community.

The new Snyder School of Nursing under construction.


Coming, as it does, just as Gov. Corzine's 'rationalization' panel
(what an unintended irony in the name!) is about to make recommendations on hospital closings throughout the state, the news does not set Solaris an easy course. Especially since the national crisis over charity care reimbursement does not look likely to ease until there is a change in the White House.

But an opportunity is presented to find a candidate that actually understands urban hospitals and has a track record at running them successfully.

Rumor has it that an appraisal commissioned by Solaris has set a value in the $40M range. Muhlenberg would not be a bride without a dowry.

Among the hospital's valuable assets are --
  • An up-to-date facility with modern equipment and systems;
  • The new Harold B. and Dorothy A. Snyder School of Nursing;
  • A nationally top-rated Coronary Intervention program (which beat out Overlook, Mountainside and Somerset Medical in HealthGrades® recent national rankings);
  • A nationally commended Cancer Care program;
  • Bariatric Surgery and Wound Care specialties; and
  • Community goodwill -- which has enabled the hospital to raise hundreds of millions of dollars over the years through the Muhlenberg Foundation and the activities of the Muhlenberg Auxiliary.
The trick will be finding the right buyer.

One that comes to mind is Lousville-based Merit Health Systems LLC which this past June bought Mountainside Hospital in Montclair. As a for-profit healthcare corporation, such a purchase would signal the end of Muhlenberg's non-profit community hospital status. This is seen as an increasingly inevitable outcome nationwide, given the financial constraints on hospitals, and it is part of the seismic shift in health care.

A ward in Muhlenberg's original building in the 4th Ward.


This new situation puts a to-do list in front of several players beyond the Solaris board.

MUHLENBERG'S OWN BOARD has an opportunity to play a strong role, both in pushing Solaris to mind its fiduciary obligations to Muhlenberg and in insisting on developing an intensive physician and staff retention program to ensure that Muhlenberg does not hemorrhage its talent pool in the time it takes to sell the hospital.

ASSEMBLYMAN JERRY GREEN can show his mojo by batting down any suggestion by the governor's 'rationalization' commission that Muhlenberg should be on the 'shutdown' list.

THE GREEN/ROBINSON-BRIGGS ADMINISTRATION can get off its behind and do something about establishing the Medical Enterprise Zone (MEZ) that was proposed by the McWilliams administration a few years ago. Despite the obviously critical situation for Muhlenberg, nothing whatsoever has been done by the current administration to implement this important economic development and marketing tool.

Firmly establishing such a zone by further extending the Urban Enterprise Zone boundary down both sides of Park Avenue past Muhlenberg to the South Plainfield line would be a significant first step.

Developing a highly targeted outreach to physician practices -- especially those whose specialties, such as imaging, involve expensive medical equipment -- could turn Park Avenue once again into a Doctor's Row that draws on and feeds into Muhlenberg. One advantage for medical practices to locate in such MEZs is that capital purchases (such as large, expensive equipment) would be exempt from the NJ sales tax. That would come to $70,000 on a $1M piece of equipment. Starts to sound like real money, doesn't it?

Finally, THE PLAINFIELD COMMUNITY and the residents and patient base of MUHLENBERG's SERVICE AREA, which includes such surrounding communities as North Plainfield, South Plainfield, Fanwood, Scotch Plains, Watchung, Warren, Dunellen and Piscataway, need to press their elected officials to see that everything possible is done to ensure a positive outcome to the situation.

Is the sale of Muhlenberg a blessing in disguise?

It can be, but only if all the players get to work on their to-do lists.

-- Dan Damon

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Anonymous said...

The closing has many reasons. One of which is not stated, is that the paying market place does not feel comfortable about using a Plainfield facility. It is the same reason that lawyers doctors, accountants, etc. do not have offices in Plainfield. It is a stigma that is not rational. The market place rules. That said, there are numerous things that the city of Plainfield can do to increase or overcome this stigma. Thye are mentioned in "Muhlenberg Hospital Sale: A Blessing in Disguise.

Anonymous said...

A Physician-

Muhlenberg and many other hospitals in New Jersey have been crushed by 47-50 million uncompensated citizens and many million undocumented aliens. Individuals fly into Newark and present to our hospitals in renal failure, or pregnant and ready to deliver. The hospitals and physicians are being sucked dry by the predatory practices of the insurance companies.
The state and federal government have done nothing to help. They cut payments and add to the overhead with meaningless documentation and regulation.
Plainfield is in a precarious political position. The Republicans have nothing to gain and the Democrats have nothing to lose.The Democrats will get the votes no matter what they do or don't do. Jerry Green has been one of the few exceptions.

What will happen to our nursing school and residency programs? How will poor people get transportation to area hospitals?
What will happen to the jobs?

Plainfield wake up!!

Muhlenberg Doc

Chris O said...

Muhlenberg for Sale by Solaris? The first question is what do they own. As a Communitty based Hospital that was built by and for the communitty, the question begs; who owns what? We posed this question to the Solaris people during the McWilliams administration simply because they were stripping Muhlenberg of its "profit centers" and it seemed to us that they were on a long range plan for something like this. I do not believe they own the land or the buildings, but maybe I am wrong.
While selling the "business" of the hospital might be valid and good for Plainfield,in as much that a NEW "partner/operator" not in direct competition in our geographic area would at least allow us to "restore" and build the "profit centers" todays Hospitals need to survive and grow. Some examples are Sloane-Kettering and other facilities with renowned reputations looking for satalitte centers for patient treatment.
Solaris wanted to sell a portion of the property when the Abbott-School fund seemed to be ripe for the picking. However they wanted to leave Plainfield with an "acute care center" (read Emergency Room) and a "long term recuperative facility" (read indigent patients), thereby allowing their Campus in Edison to thrive with the profit centers, while keeping the "rif-raff" element away from their campus. We believed this was their plan then, so beware of what the plan is now.
I would submit that if our geographic market cannot handle two Hospitals then maybe it should be only one facility, period.
If it should go Solaris's way then "winner take all", period.
Plainfield would then have a pretty nice Campus for a University or College, but hey that would mean smart people and Jerry would hate that.
Lastly, Muhlenberg sits within striking distance of many upscale communitties and is across the street is a beautifal Tennis Center etc. where people play into the evenings. What's so bad about this neighborhood? I am glad Solaris doesn't own the world renowned Columbia Hospital in (dare I say) Harlem.
Chris O