HOBOKEN — Amdist fears that it might close due to financial difficulties, Hoboken’s only hospital will receive $7 million from the New Jersey Department of Health and Human Services from the State’s Health Care Stabilization Fund, the city announced Tuesday afternoon.
Last month, the hospital’s CEO said that the facility needed $10 million in aid from the state in order to stay open.
While the aid amount is $3 million short, it is more than some predicting the ailing facility would receive, in light of outgoing Gov. Jon Corzine’s announcement that the state was pulling back on aid to municipalitiles. Some wondered if the incoming administration of Gov. Christopher Christie would pull back further.
“This funding is very welcome news since it recognizes Hoboken UMC as an essential safety-net hospital and will allow much needed additional time to improve the hospital’s financial performance and pursue its recovery plan,” Mayor Dawn Zimmer commented. Zimmer saidmore work needs to be done to ensure that the hospital will be financially self sufficient and she is confident the new CEO and his management team are taking the necessary steps to improve revenues and lower costs.
Zimmer and the hospital’s CEO, Spiros Hatiras, together thanked Governor Jon Corzine and Health Commissioner Heather Howard, as well as members of the Governor-elect Chris Christie Transition Team which supported the awards.
She also expressed gratitude to Senator Robert Menendez, State Senator Brian Stack, Assemblyman Ruben Ramos, former State Senator Bernard Kenny and members of the Hoboken City Council for their advocacy and support of the hospital.
Mr. Hatiras previously announced a budget reduction plan with a goal of reaching a break-even financial result for 2010. He said that the Stabilization Grant funding is a part of the recovery plan and does not lessen the need for the hospital to reduce its operating expenses.
He explained, “success of the plan will require shared sacrifice by everyone at the hospital; the senior management team has set an example and already taken a 10 percent salary decrease.”
Mayor Zimmer noted that Mr. Hatiras voluntarily led by taking a 15 percent reduction.
The financially struggling St. Mary Hospital was made a City entity in 2006. The City guaranteed $52 million in bonds for capital projects starting with the new Emergency Room. Approximately $9 million has been used to fund operating expenses. The hospital lost $22.8 million in 2008 on a budget of $136,000,000.
Taxpayers have been concerned that if the hospital failed, they would be on the hook for more than $52 million.
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