Residents packed the Our Lady of Grace Auditorium on Thursday night to speak out about the pending sale of Hoboken University Medical Center in a public hearing held by the state Health Planning Board.
The hospital is in the process of being sold to a group that has common ownership with Bayonne Medical Center. The state Health Planning Board is scheduled to hold a hearing in Trenton, tentatively scheduled for Aug. 4, and then they will make a recommendation to the Department of Health as to whether or not they believe the sale should be approved. The Department of Health would then have to issue a Certificate of Need to the applicants to finalize the deal.
When the hospital was on the verge of failing in 2007, the city took ownership of the facility. The City Council guaranteed $52 million in bonds to underwrite its operations and established the autonomous Hoboken Municipal Hospital Authority to run the hospital.
‘Our hospital cannot survive as a stand-alone community facility.’ – Mayor Dawn Zimmer
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A $91.7 million deal was approved in late April by the authority. The deal includes $51.6 million to extinguish the city’s bond guarantee, $20.9 million in investments, and $19.2 million spent on “other deal considerations,” including accounts receivable and liabilities assumed as part of the transaction.
Public sounds off
The public hearing lasted for two hours on Thursday night.
Many of the speakers were doctors from Bayonne who spoke out in favor of the deal. The doctors spoke of improvements that were made when the potential owners of HUMC took over BMC in 2007.
Mayor Dawn Zimmer adamantly supported the sale of the hospital, urging the board to give their recommendation to the Department of Health.
“The transaction will achieve two objectives few thought possible,” Zimmer said. “It both saves the hospital and relieves the city of its potentially crippling $52 million loan guarantee. Our hospital cannot survive as a stand-alone community facility. The financial challenges are simply not sustainable. If the sale doesn’t go through, our hospital will close. That is unacceptable.”
If the hospital were to close, the city would be responsible for the $52 million bond guarantee.
When the owners from Bayonne took over BMC, they canceled insurance contracts, forcing patients to pay out-of-network fees for service, which are much higher than regular costs.
The new owners have said, while answering questions from the state, that they will look to re-negotiate insurance contracts in Hoboken, because they believe the hospital is not getting fair compensation from insurance companies. As the owners of two hospitals in Hudson County, they could have leverage in the negotiations.
Wardell Sanders, the president of New Jersey Leading Health Care Plans, said his organization doesn’t usually become involved in the Certificate of Need process. Sanders spoke out against the deal, citing the insurance contracts being cut in Bayonne and the rise in service costs.
The authority has said that Medicaid and Medicare, as well as the health insurance of municipal employees, would not be affected no matter what happens with the insurance contracts.
Hudson County Freeholder Anthony Romano said he had concerns about the new ownership, adding that he hopes the nurse’s jobs are not in jeopardy.
The new ownership has promised to keep at least 75 percent of the workforce.
Virginia Treacy, the head of the nurse’s union, JNESO, said she had some concerns about the terms of the deal.
Treacy said she was not opposed to the sale of the hospital, but she wanted a public review of the sale. Her union handed out flyers outside of the hearing advocating for the review. Usually, when a hospital is sold, the Attorney General’s office reviews the details of the sale in a Community Health Care Asset Protections Act (CHAPA) review. However, since HUMC is municipally owned, the review isn’t required.
Treacy challenged the idea that the hospital would close if the sale didn’t go through. She also pointed out that, in the Asset Purchase Agreement, the approximately $20 million for capital improvements were not contractually required.
There were people at the hearing who spoke out for the sale.
Resident Scott Siegel, a regular on the political scene in Hoboken who supports the sale, spoke about the financial consequences of the city having to pay the $52 million bond guarantee.
Dr. Frank Solano, the director of the Family Puerto Rican Institute, also spoke out for the sale, saying his organization has had a seven year partnership with HUMC, and he wants to see the hospital remain open.
As part of the sale, the hospital would be required to operate as a medical health facility for at least seven years.
“That’s short term, that’s not long term,” said George Anderson. “That’s a showstopper as far as I’m concerned. That period of time should be like 50 years or 100 years, not seven.”
Resident Mary Ondrejka said she is worried that the sale is a real estate deal.
Hospital Authority Chairwoman Toni Tomarazzo said the authority sent out 170 requests for proposals when the sale process began, and they received eight responses. Of the eight responses, six qualified for the bid.
Tomarazzo noted that when the previous owners tried to sell the hospital to a private buyer in 2007, they received no responses.
“The future of health care in Hudson County is in excellent hands,” Tomarazzo said.
After the next hearing in Trenton, the State Health Planning Board will make a review to the New Jersey Department of Health on the sale, which could signify the end of the sale process.
Ray Smith may be reached at RSmith@hudsonreporter.com