Dear Editor:
It’s been less than two weeks since Hudson Healthcare, Inc. (HHI), the not-for-profit manager and operator of Hoboken University Medical Center (HUMC), filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. We took that step to ensure the hospital would be able to continue operating until completion of its sale to HUMC Holdco LLC, an entity sharing common ownership with Bayonne Medical Center.
However, the move seems to have created plenty of confusion about our intentions and the effects of the filing. I’d like to provide a simple explanation why this filing was a positive move – something that will benefit all stakeholders, promote public health and safety, maximize value for all of HHI’s creditors and smoothly transfer operations to the new ownership group.
First, let me emphasize that HHI filed for Chapter 11 protection so that it can continue to operate in the ordinary course of business until the sale of the hospital takes place. This means that it will be business as usual at the hospital. Second, the filing gives HHI a chance to catch its breath and stop creditors’ collection attempts that would have compromised patient safety. This ensures that HHI will be able to continue operating HUMC and prevent costly litigation that could delay or even prevent the completion of the hospital’s transfer to the new owner.
Finally, the reasons for HHI’s bankruptcy filing are simple and unfortunate. Hospitals like ours are not reimbursed adequately for the services they provide. In addition to having some of the highest health care costs in the nation, New Jersey requires all hospitals to provide medical care to patients regardless of their ability to pay. New Jersey hospitals receive the lowest Medicaid reimbursement in the United States.
In addition, private insurers have refused to renegotiate contracts signed years ago that do not cover current costs of operating a full-service acute-care facility. The citizens of Hoboken and all the people who rely on HUMC for care need to understand that HHI, along with the Hospital Authority, Mayor Zimmer and all of the professionals working at HUMC have one common goal – to save the hospital and maintain it to serve area residents for years to come.
Sincerely,
Vincent Riccitelli
Acting CEO, HUMC