TRENTON — The sale of Hoboken University Medical Center can proceed as long as the for-profit buyer, HUMC Holdco LLC, meets certain conditions, a state health panel ruled today. Those conditions, however, were weaker than the ones proposed by the Department of Health and Senior Services, which oversees hospital sales, because Holdco threatened to trash the deal. "The choice...
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The Hoboken University Medical Center received $11 million from the state to pay the interest on $52 million in city-guaranteed bonds that will be retired as part of sale of the hospital.TRENTON — The sale of Hoboken University Medical Center can proceed as long as the for-profit buyer, HUMC Holdco LLC, meets certain conditions, a state health panel ruled today.
Those conditions, however, were weaker than the ones proposed by the Department of Health and Senior Services, which oversees hospital sales, because Holdco threatened to trash the deal.
"The choice is an easy one," Phillip Schaengold, Holdco’s chief transition officer, told the State Health Planning Board. "Without new ownership, (Hoboken University Medical Center) will shut down, depriving the city of its hospital. However, if the sale to Holdco is approved with our conditions, (it) will stay open."
The board’s recommendation, approved by a 5-0 vote, does not require Holdco to honor existing insurance contracts. Instead, Holdco must only negotiate in "good faith" to draw up new contracts.
In its original proposal, the state health department wanted Holdco to honor existing insurance contracts for one year as a way to protect current patients who have planned surgeries and give them time to transfer to another hospital.
Critics of the deal said patients will suffer under the new owners who, they believe, want to save money by not partnering with insurance providers. Such a scenario would cost patients more in co-pays and deductibles, the critics said.
"The board seemed to reflect and give credence to many of the concerns of the stakeholders but felt disempowered to stop this," said Renee Steinhagen, executive director of New Jersey Appleseed Public Law Center. "You got the feeling they felt they were required to make this deal happen."
Steinhagen and others opposed to the sale pointed to Holdco’s 2008 takeover of the Bayonne Medical Center. More than two years later, the company has contracted with just one insurance carrier. Schaengold said the company is actively negotiating contracts and having two hospitals should help. "Our model is not an out-of-network model," he said.
The board’s recommendation now goes to state Health Commissioner Mary O’Dowd, who will make a final decision.
Earlier this year, the Hoboken Municipal Hospital Authority agreed to sell the cash-strapped medical center to Holdco. In return, the company will settle the city’s $52 million in hospital debt and upgrade the decades-old facility.
The deal also appears to have political support. Toay, The Star-Ledger reported on an $11 million earmark in the current state budget to help drive down the cost of the deal. The money will be used to pay the interest on the debt.
Previous Coverage:
• Hoboken hospital escapes Gov. Christie veto, gets $11M from N.J.