Community Healthcare Associates’ Purchase of Memorial Hospital of Salem County

The deal will include CHA paying $1 million to the current owners as well as returning any cash on hand, rumored to be around $3 million. While CHA has no plans to add any services dropped by Memorial Hospital, it does plan to maintain the acute-care functions of the hospital rather than gutting the whole facility. CHA asserts that it will keep the core operations as a non-profit, while bringing in other provider services that may or may not be for-profit businesses.

CERTIFICATE OF NEED APPLICATION/TRANSFER OF OWNERSHIP AGREEMENT

Because this is the purchase of a for-profit hospital by a for-profit entity, the NJ Department of Health (DOH) Certificate of Need (CN) process must be followed. Under the CN process, the NJ Commissioner of Health can provide a set of recommendations in order to complete the sale.

In order to maintain a non-profit status for Memorial Hospital, CHA created a new non-profit corporation, Salem County Hospital Corp. (SCHC). As part of the CN application the Transfer of Ownership Agreement submitted to the Department of Health states that SCHC “will implement several initiatives that are designed to stabilize and/or grow admissions at the hospital and allow SCHC to meet the healthcare needs of the community for years to come.”

Besides recruiting more physicians, SCHC plans to create “operational efficiencies” to the emergency department (ED) that will create greater access to care and decrease time paramedics and EMTs are required to wait in the ED, which will mean more patients will be seen. The Agreement states that SCHC “will hire substantially all of those individuals who are employed by Salem Hospital as of the closing date.”

Current Charity Care Policies will remain in place and it is assumed there will be no disruption to care provided to the poor and uninsured. Additionally, no services will be eliminated, although some like Med/Surg will be reduced from 114 beds to 65 beds with the flexibility to increase if the need arises. SCHC will assess the needs of the community and may add services. The total number of beds will increase slightly from 126 to 133 beds, with an addition of 26 Adult Acute Psychiatric beds (approved by DOH in November 2017) and 30 Long Term Care beds. Adult ICU/CCU beds will remain at 12.

In addition to maintaining the hospital, SCHC will continue the clinical services offered by doctors affiliated with the hospital.

STATE BOARD APPROVES PLAN

The New Jersey State Health Planning Board held a public meeting on December 6, 2018 to give involved parties and interested citizens an opportunity to give more detail or air concerns regarding the CHA’s purchase of the hospital. While there were some concerns about how the addition of long-term care beds would affect existing long-term care facilities in the area, the Board voted to approve the plan by a vote of 3 to 1. After Board approval the CN application was submitted to the Commissioner of Health for approval or denial. The Commissioner approved the transfer on January 15, 2019. One of the chief conditions was the requirement that CHA maintain the facility as an acute-care hospital and all services for at least ten years.