Curing what ails the Jersey City Medical Center Report by Chicago firm calls for cuts in salaries, services

What would it take to get the Jersey City Medical Center (JCMC) to be a healthier financial institution?

A report prepared in October by the Chicago-based Wellspring Partners calls for cutting staff and various services programs and attracting more private care physicians and a better paying clientele.

The report also points out that LibertyHealth Systems, the parent company for the Medical Center, will need to cut 212 full-time jobs with 65 coming from the Jersey City Medical Center.

According to the report, issued Oct. 10 but only recently made public, the Medical Center is facing increasing gaps in their $360 million budget over the next three years – $20M in 2006, $48M in 2007 and $66 million in 2008 – even after receiving state funding.

The report goes on to say if improvements aren’t made to the financial situation of the LibertyHealth System, it will run out of cash in early 2007.

The report states, “The System is dependent on extraordinary state funding indefinitely” and “Given the charity care volume at JCMC, additional state support may be required.”

Charity care is reimbursable care that a hospital provides to patients without insurance or funds to pay.

The report also outlines $34 million in state aid that is promised for FY 2007 and 2008, but says that there will still be a $32 million hole in the budget.

Fifteen million dollars of this financial hole could be filled through staff cuts, better collection of bills and restructuring contracts, with another $17 million to be supplemented through cutting a number of programs.Why it was prepared

Wellspring Partners began preparing the report after former Jersey City Medical Center head Dr. Jonathan Metsch requested it in order to satisfy a state mandate.

However, Metsch resigned after the report’s findings were completed. He has thusfar declined to comment on his reasons. Dealing with charity care

Alan Marcus, the spokesperson for the Jersey City Medical Center, spoke last week on one key problem afflicting the hospital – charity care.

“There are things that the hospital can do or any organization can do to get better,” he said, “but the problem is not going to be resolved at the Jersey City Medical Center or at other health care institutions until the issue of how to deliver care to those [poor] populations are better dealt with.”

The Medical Center averaged $77 million in charity care expenses per year for the past three years. The state gave the center a little over $52 million in charity care funds last year.

“In the case of the Jersey City Medical Center, 64 percent of the patients are Medicaid and charity care, and there’s not enough [paying] patients,” said George Whetsell, the founder of Wellspring Partners. Whetsell also said there was not enough money coming from other sources such as Medicare and managed care programs.

Rosemary McFadden, vice chair of LibertyHealth, pointed out that the state’s funding of hospitals has been frozen at a specific amount since 2002, which creates a deficit.

But she said the hospital has to fulfill its goal as a healthcare facility – even at a cost.

“That’s always been the mission of the Jersey City Medical Center…to treat anybody who shows up in our emergency room,” said McFadden.

Whetsell also pointed that the Medical Center incurred other expenses from running the ambulance service for Jersey City, a training center for new doctors, and its designation as a Level 2 Trauma medical facility that provides 24-hour trauma surgery for adults and children. Making the improvements

McFadden said the facility must court private physicians to send their patients to the hospital.

“We realize we have to work on improving our relationships with private doctors [because] many of their patients are being sent to other hospitals rather than to the Medical Center,” said McFadden.

She said the Medical Center will soon build a nearby complex for private practitioners, so they can send their patients a short distance.

McFadden also said a number of staff in top positions have either left or will be cut back because they were hired specifically to get the current hospital built and smooth the transition from the old hospital building to the new one. Ricardo Kaulessar can be reached at


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