If everything goes according to Mayor Dawn Zimmer’s plan, Hoboken University Medical Center will no longer be a financial burden on the city government, and will remain an establishment where acute services are provided to city residents.
The city has received proposals from outside companies to purchase the hospital, which might ultimately relieve the city of $52 million of municipal bond debt it has incurred to underwrite the hospital’s operations. Both Zimmer and Hoboken Municipal Authority Chairwoman Toni Tomarazzo are hopeful, and confident, that the hospital will sell for more than $52 million.
We want to know, what does the stakeholder group want to see? – Mayor Dawn Zimmer
Keep it alive as a hospital
In 2006, when the hospital was in danger of closing because of financial troubles, the administration of former Mayor Dave Roberts saw a need to keep the hospital alive and the city sold $52 million in bonds to guarantee its finances.
Since then, the city has tried to find an appropriate buyer, and now, at the same time, prepare the hospital for the impact of the recent federal health care reform legislation.
“It was always meant to be a transition opportunity,” Tomarazzo said.
Zimmer said that her vision for the hospital is to maintain the hospital in the city, and address the financial challenges of guaranteeing a $52 million bond.
Tomarrazzo said a year ago the hospital was in difficult financial condition but in the past year conditions have improved and the hospital is now operating with balanced budget.
“I’m very excited that we have an opportunity for a win-win,” Zimmer said. “I’m interested in maintaining acute care services. I would not be interested, and wouldn’t consider, someone who says they want to turn the building into condos. I want to maintain the services and address financial issues.”
Hoboken University Medical Center is dependent on state aid. Patient payments do not cover the costs of the hospital, and with the current financial problems of the state, Tomarazzo does not believe the state can handle the subsidies anymore.
“In late July, early August, we sent out a request for proposals,” Tomarazzo said. “The return date was Sept. 13.”
Zimmer believes the residents would like to keep a hospital in the city limits. Hoboken University Medical Center was previously known as St. Mary’s Hospital, but the city assumed ownership of the hospital in February 2007. The former owner of the hospital was Bon Secours Health System, Inc.
The Hospital Authority, the bonding entity, bonded for $52 million when Bon Secours sold the hospital. Now, the city has guaranteed the bond, which is why the hospital must be sold for at least $52 million.
Form a committee
Now that the city has received proposals, Zimmer hopes to form a stakeholders committee which will look over the request for proposals submitted to the city.
Zimmer said she is hoping members of the group will consist of a mix of residents, taxpayers, hospital staff, physicians, someone who has given birth at the hospital, representatives from the Women’s Auxiliary Board, the Hoboken Housing Authority, and others.
Hoboken residents are encouraged to apply for the committee by e-mailing a short cover letter and biography to email@example.com by Oct. 16.
According to Zimmer, the process will include members reviewing the proposals without the names of the interested companies attached to the descriptions, and then the members will fill out individual surveys about the interested parties.
“Physician, hospital staff, and community input are critical to this phase of the conversation,” Tomarazzao said in a press release.
The committee meetings will take place on Oct. 18, and Oct. 23. Tomarazzo anticipates the process of reviewing the proposals to last approximately three to four weeks. Once the stakeholders narrow the potential purchasers down to a small number of final interested buyers, the names will be revealed and the potential new owners will be able to tour the hospital, and meet the staff.
“We want to know, what does the stakeholder group want to see?” Zimmer said.
Ray Smith can be reached at RSmith@hudsonreporter.com.