Solaris Healthsystems delivered the bad news to the board of Plainfield's Muhlenberg Regional Medical Center this morning.
After an illustrious 131 years, Plainfield will no longer have an acute-care community hospital.
A detailed review of four proposals submitted to Solaris for the purchase of Muhlenberg simply left enough issues unresolved -- primarily the hospital's indebtedness -- to make any one of them a viable option.
Accordingly, Solaris will file with the state by March 1st for a 'certificate of need' by which the state will grant permission to shut the acute-care facility down. The entire process is estimated to take about six months, meaning the hospital could shut down by September.
In a press release, Solaris CEO John McGee says that while there will no longer be acute-care services at the Muhlenberg facility, Solaris will operate a satellite Emergency Room at the facility and continue the Home Care services operation as well as the newly opened School of Nursing. (Paradoxically, while hospitals are struggling financially, there is an acute nursing shortage throughout the country.)
The financial woes at Muhlenberg have mounted year over year. Like other hospitals, charity care reimbursement comes in at around 40¢ on the dollar, meaning 60¢ of expenses had to be taken by the hospital with no hope for reimbursement. Losses for the current year are in excess of $11 million and are projected to be over $17 million for 2009, and have simply reached the level that they are unsustainable.
The state may well say that the problem is the federal government does not have a sufficient reimbursement plan, which is a nationwide problem. And that may change once a new administration is in place in Washington. But that, of course, will be no help for Muhlenberg.
Is it possible for buyer to surface before the shutdown? Possible, but not likely. The offers already received are the best that are out there. Those who may think that Solaris has ditched Muhlenberg in order to save JFK might be surprised to learn that JFK has its own financial woes and may eventually suffer the same fate as Muhlenberg.
THE PLAINFIELD IMPACT
Closing Muhlenberg is going to have a long-term deleterious economic impact on Plainfield.
Not only will many of the jobs evaporate, putting financial stresses on former employees that may lead to loss of homes and apartments, health insurance and other calamities, there will be a ripple effect throughout the community.
Without a hospital, what incentive will doctors have to have large offices in Plainfield, particularly along the Park Avenue 'Doctor's Row'?
Not much, far as I can see.
So, as we slide into a recession that has already impacted Plainfield's residential real estate market -- and may well do so for several years -- we can now face the prospect of more vacant professional buildings.
That will include not only the larger medical office complexes, but the smaller former residences which have been converted into offices for doctors and allied health services.
All of this could have tax consequences, both rising back taxes and falling tax receipts as property values fall and more and more property owners appeal their assessments.
Could all this have been averted?
I don't know for sure, but I do know that the Green/Robinson-Briggs administration must bear the burden of not having tried to do ANYTHING. As I have pointed out before, there WAS something the Green/Robinson-Briggs administration could be doing --
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.But alas, they wouldn't seem to know an opportunity if it walked up and bopped them in the nose.
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?
Perhaps I am being too harsh. Perhaps the Assemblyman has a developer in his hip pocket who can turn the Muhlenberg campus into a 'transit oriented development'.
Order a sandwich platter! This could get interesting.
- BACKGROUND --
- Plainfield Today (11/16/2007): "Muhlenberg sale: A blessing in disguise?"
- Plainfield Today (12/21/2007): "Is this Muhlenberg's solution?"
-- Dan Damon
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