The recession has impacted many business entities in New Jersey over the past few years, including those providing medical services. One area of concern up in Hudson County is what is perceived as a glut of hospital space that has left three hospitals seeking financial relief. One of them, Christ Hospital, filed for Chapter 11 bankruptcy protection during the week of Feb. 6.
That action provides the hospital with the opportunity to present a financial plan to stay in business under the auspices of the court while keeping creditors at bay. In the meantime, efforts are under way to solve the hospital’s economic crisis through a sale or merger with other nearby institutions.
Christ Hospital is not the only medical center in financial trouble in Hudson County. Jersey City Medical Center and Hoboken University Medical Center have suffered similar setbacks, and a study disclosed that the three institutions combined have created a situation where each is operating at less than full inpatient capacity. Part of the reason for this problem appears to be that the hospitals duplicate many services, and it was previously suggested that the three centers merge to streamline and consolidate all services offered to the community.
Indeed, Christ Hospital had been in negotiations with a for-profit healthcare facility from out of state to sell. When that transaction fell through, it resorted to the Chapter 11 filing in order to protect its financial interests while it devised a plan for consideration and approval by the court.
Speculation has surfaced that this action may actually lead to a solution between several entities to combine services and create a stronger and more profitable organization. Hoboken University Medical Center was sold by the City of Hoboken to the Bayonne Medical Center. Now there is talk that Christ Hospital and Jersey City Medical Center may be a good fit to consolidate and regionalize the medical services each offers. While it remains to be seen what the final outcome will be, it appears clear that the Chapter 11 filing has created breathing space for hospital administrators as well as an opportunity to both remain in business and solve its financial headaches.
Source: NJ Spotlight, “Hospitals’ bankruptcy stokes talks on merger in Hudson County,” Beth Fitzgerald, Feb. 8, 2012