MAY 2015 Visit us now online at www.NJPhysician.org
Lawmakers Unveil Out-Of-Network” Health Care Reform Bill New York Hospitals Cast an Acquisitive Eye Toward New Jersey Federal Research Bill Holds Promise for ‘Personalized Medicine’ in New Jersey
Published by Montdor Medical Media, LLC Co-Publisher and Managing Editors Iris and Michael Goldberg Contributing Writers Tom Bergeron Beth Fitzgerald Andrew George Andrew Kitchenman Lisa Ward Layout and Design - B&L Printing, Co. Inc. New Jersey Physician is published monthly by Montdor Medical Media, LLC., PO Box 257 Livingston NJ 07039 Tel: 973.994.0068 Fax: 973.994.2063 For Information on Advertising in New Jersey Physician, please contact Iris Goldberg at 973.994.0068 or at igoldberg@NJPhysician.org Send Press Releases and all other information related to this publication to igoldberg@NJPhysician.org Although every precaution is taken to ensure accuracy of published materials, New Jersey Physician cannot be held responsible for opinions expressed or facts supplied by its authors. All rights reserved, Reproduction in whole or in part without written permission is prohibited. No part of this publication may be reproduced or transmitted in any form or by any means without the written permission from Montdor Medical Media. Copyright 2010. Subscription rates: $48.00 per year $6.95 per issue Advertising rates on request New Jersey Physician magazine is an independent publication for the medical community of our state and is not a publication of NJ Physicians Association
Contents
Lawmakers Unveil Out of Network Health Care Reform Bill CONTENTS
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7 The Basics of the Out of Network Bill 8 New York Hospitals Cast an Acquisitive Eye Toward New Jersey 10 Federal Research Bill Holds Promise for ‘Personalized Medicine’ in New Jersey 12 Three N.J. Hospitals Named to U.S. News ‘Common Care’ List 14 Latest Facility Epitomizes Summit Medical Group’s Growth, CEO’s Vision
for the Future of Health Care
16 Meridian Partnership Bolsters its Ongoing High-Tech Health Care
Device Pipeliine
18 Barnabas, VNA Health Group Form Home-Health Alliance 19 Outpatient Surgery Centers Add $3.7B to NJ Economy, Study Finds 20 University Hospital EMS Earns Award From the American Heart Association 20 Barnabas Breaking Ground on $250M Expansion 22 Hackensack, Meridian Sign Definitive Agreement to Merge
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May 2015 5
Cover Story
Lawmakers Unveil OutOf-Network Health Care Reform Bill By Andrew George
T
he landmark out-of-network reform bill introduced Thursday by several top Democratic lawmakers sent health care providers and insurers into immediate spin mode, with each side pleading its case on the controversial issue. But, if you talk to the lawmakers, consumers were their top priority. The bill’s sponsors hope it will bring transparency to New Jersey’s current out-of-network fee structure and soften the financial blow dealt to insured patients receiving urgent or emergency care at an out-of-network facility. “First and foremost, that’s what we sought to achieve,” Assemblyman Craig Coughlin (D-Woodbridge) said. Assemblyman Troy Singleton (D-Mount Laurel) said ensuring access to quality care has long been a legislative priority. This bill, he said, “is an extension of that effort.” “We’ve all seen or heard of horror stories from folks who’ve gotten these surprise bills when they’ve gotten medical procedures,” he said. “That can have a detrimental effect to anyone’s bottom line.” Coughlin and Singleton introduced the bill Thursday alongside state Sen. Joe Vitale (D-Woodbridge) and Assemblyman Gary Schaer (D-Passaic). “I think it is a momentous day in New Jersey’s history,” Schaer said. Under the bill, health care facilities would be prohibited from billing the patient for urgent or emergency out-of-network care in excess of any of the deductibles, copayments or coinsurance amounts that they would normally charge for innetwork care. The bill also would restrict health care facilities from billing the out-of-network patient’s insurance carrier in excess of the maximum payment for a given urgent or emergency service. That maximum payment, which would range from 75 percent to 250 percent of the median paid in-network cost for a particular service, would be set by an established health 6 New Jersey Physician
care price index, to be maintained by an organization of the Department of Banking and Insurance’s choosing. The selected organization would be responsible for gathering and analyzing the health care data needed to form the health care price index, which will also be electronically published and made public. The bill also would force insurance companies to update their websites at least every 20 days with lists of all in-network providers. Making the data available will limit those unwanted surprises, Singleton said. “There are some providers who use the out-of-network structure as part of their business model,” Singleton said. “What we’re trying to do is create some structure to this system.” If reimbursement for out-of-network costs cannot be agreed upon within a 30-day period following the initial billing, both the insurance carrier and the facility have the option of entering into a binding arbitration process. “There needed to be a way to resolve these issues,” Coughlin said of the arbitration process. Singleton noted that, in Illinois, where a similar measure is on the books, there has yet to be a significant number of arbitration cases. Transparency is another major component of the bill. The lawmakers said that, all too often, they hear anecdotes from their constituents about “surprise bills” after receiving out-of-network care. The bill would cover situations in which a patient at an innetwork hospital for a nonemergency procedure receives care from an out-of-network provider based at that hospital. “It is completely unreasonable and horribly unsafe to expect a patient lying on a hospital bed waiting to go into surgery to ask the anesthesiologist assigned to their care if they accept their insurance,” Vitale said.
The bill would stipulate that at least 30 days prior to a medical procedure, health care facilities would be responsible for offering patients a written disclosure form regarding the innetwork or out-of-network status of the services to be performed. The disclosure would have to include a thorough and clear description of the procedure as well as an estimate of all associated costs. In addition to that, patients must also be advised to further consult with their insurance carriers. Schaer noted that nothing in the measure would preclude patients from seeking out-of-network care if they choose to do so, as long as they knowingly understand the financial ramifications of doing so. “They will be responsible for the additional prices,” he said. Of course, some blowback is expected. Already, CarePoint Health CEO Dennis Kelly has spoken out on the proposed measure, advocating instead for an alternative system in which equivalent reimbursement rates would be issued for all patient encounters.
Kelly added that CarePoint facilities, in addition to other urban hospitals, may be forced to close, as out-of-network payments help sustain the care they offer. Vitale said that, while he understands some of those points, he questions why facilities haven’t been charging the going rate for a “stitch and a Band-Aid” to begin with. “There has to be a matter of fairness here,” Vitale said. Singleton added that, when all involved parties know what they’re getting into, everyone wins. “I think predictability in any system is beneficial to everyone,” he said. While lawmakers did not offer a detailed road map for the bill, they are expected to meet with various stakeholders to discuss it further May 22, which Coughlin said will be “probably a marathon day for us.” “Beyond that, we don’t have any specifics,” he said.
The Basics of the Out-OfNetwork Bill By Andrew George
T
he out-of-network reform bill introduced Thursday covers more than just emergency room out-of-network care; it also covers “inadvertent” out-of-network care, such as when a patient goes to an in-network hospital for a nonemergency procedure and gets care from an out-of-network provider (anesthesiologist, radiologist, pathologist, etc.) who works at the in-network hospital.
A look at the key components of the bill: • Health care facilities would be prohibited from billing the patient for urgent or emergency out-of-network care in excess of any of the deductibles, copayments or coinsurance amounts that they would normally charge for in-network care. • Health care facilities would be restricted from billing the out-of-network patient’s insurance carrier in excess of the maximum payment (to be set by the health price index) for a given urgent or emergency service. • At least every 20 days, insurance carriers must publish an updated list of all in-network providers. • Health care facilities must offer patients a written disclosure form at least 30 days prior to a medical procedure that states whether or not the service will be in-network or out-of-network and gives a reasonable estimate for all associated costs with the service, which must also be thoroughly explained.
May 2015 7
Hospital Rounds
New York Hospitals Cast an Acquisitive Eye Toward New Jersey Wave of mergers shifts market across the Hudson. By Lisa Ward
M
ore than a dozen hospitals in New Jersey have announced acquisitions in the past two years, a flurry of mergers that has left only a handful of independent hospitals in the state.
But recently, two very large transactions took shape: a merger between Hackensack University Health Network and Meridian Health, and a strategic alliance between Barnabas Health and Robert Wood Johnson Health System. Those two deals could create health systems that rival the scale of their counterparts across the Hudson River—and that threaten current patient-referral patterns to New York hospitals. “These are heavily advertised to signal to New Jersey consumers that they don’t need to leave the state to get world-class care,” said Katherine Hempstead, a director at the Robert Wood Johnson Foundation. The New York City and New Jersey hospital markets are similar in some respects. Both have seen their community hospitals gobbled up by mergers. There has been a wave of affiliations on both sides of the Hudson River—some with national brand names, such as the Cleveland Clinic. But there is a significant difference between the markets. Unlike New York, the Garden State has no prohibition against private-equity or publicly traded companies from owning hospitals. That regulatory framework means New Jersey hospitals have an advantage: much greater access to capital from deep-pocketed parent companies or partners. For-profit hospitals and investors started bargain hunting in New Jersey in 2002, intent on scooping up struggling facilities. Today they represent about 15% of the market, according to the New Jersey Hospital Association. For example, Prime Healthcare Services, a California company, completed its acquisition of St. Mary’s Hospital in Passaic for $85 million in August. It is in the process of acquiring St. Claire’s Health System in Dover, Denville and Boonton, as well as St. Michael’s Medical Center in Newark. Private-equity-backed LHP Hospital Group entered into a joint venture with nonprofit Hackensack University Health to buy Pascack Valley Hospital out of bankruptcy for $147 million in 2008, followed by Mountainside Hospital for $190 million in 2012, according to Fitch Ratings. The merger activity is driven by New Jersey nonprofit hospitals’ efforts to shore up their market positions and balance sheets. “Hospital expenses are often growing faster than revenues,” said Lisa Goldstein, associate managing director of the Public Finance Group at Moody’s Investors Service. She added that mergers have become a way for hospitals nationally to add revenue and reduce fixed expenses, including investment in new technology and payment systems required by national health care reforms.
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Barnabas Health bought Jersey City Medical Center in June 2014 and now owns seven acute care facilities, making it the largest hospital operator in the state—for now. Last month, Meridian Health and Hackensack University Health Network signed a definitive agreement to merge. The new system, Hackensack Meridian Health, is forming after nearly seven months of due diligence. The tie-up still requires state and federal regulatory clearance, expected within nine to 12 months. The 11-hospital system will have about 25,000 employees and nearly 6,000 physicians on staff. The combined system currently has annual revenue of $3.4 billion, which is projected to hit $4 billion once the deal receives all regulatory approvals, said Robert Garrett, Hackensack University Health Network president and chief executive. Its market share will be nearly 15%, according to an upcoming report by the Robert Wood Johnson Foundation. In January, Barnabas and Robert Wood Johnson Health System said they were exploring a strategic partnership. If the two merge, the combined system would operate 10 hospitals and have about $4.5 billion in annual revenue and a market share of almost 20%, according to the upcoming report. In comparison, 2014 annual revenue at the North Shore-LIJ Health System was $7.4 billion, and $4.5 billion at the New York-Presbyterian Hospital system. NYU Langone Medical Center had $3.7 billion in revenue last year. “We were expecting deals of this magnitude,” said Elizabeth Ryan, president and chief executive of the New Jersey Hospital Association, adding that other states, such as Massachusetts, saw large hospital systems come together several years ago. One of the stated goals of the Hackensack-Meridian merger is to develop new, nonhospital services. This means buying or aligning with ambulatory centers, rehabilitation facilities, urgent care centers, retail clinics, physician groups and insurance companies. “Almost half of New Jersey residents will have one of our hospitals or ambulatory centers within a 10-minute drive,” said Mr. Garrett. “Increasingly, health care will be provided outside the four walls of a hospital.” Outpatient facilities extend the geographic reach of health systems into new, often more-affluent areas, the RWJF report finds. The idea is to make it easier for patients, especially those with good medical insurance, to access the medical system and give them an incentive to stay local rather than travel elsewhere. “Fewer patients are crossing the river for routine care,” said Bruce Vladeck, a senior adviser at Nexera, a for-profit subsidiary of the Greater New York Hospital Association, adding that there has been a gradual erosion over the years of the number of New Jersey patients seeking treatment in New York. Internationally acclaimed hospitals are also creating points of contact in New Jersey that could affect referral networks for more-complex procedures. Cleveland Clinic added Valley Health System in Ridgewood, N.J., to its network of affiliated cardiovascular hospitals. Memorial Sloan Kettering Cancer Center is planning on opening two more facilities in New Jersey, in addition to one it already operates in Basking Ridge. Opportunity lies in the fact that New Jersey’s market is fragmented. Other states, such as Texas, have a handful of health systems that dominate a market. Some experts even believe it’s only a matter of time before national systems emerge. If for-profit companies are successful in New Jersey, then New York might be willing to explore the model, said Carsten Beith, an investment banker at Cain Brothers & Co. He believes it is likely a New York health system will acquire a hospital system across the river. Some already have crossed the Hudson to expand their reach and create a presence through affiliations. The Mount Sinai Health System partnered with Valley Health in December to collaborate on clinical programs, research and educational initiatives. Earlier this year, North Shore-LIJ aligned with Barnabas Health. But North Shore-LIJ isn’t ruling out a future expansion to New Jersey after it digests transactions already in the works. “There’s nothing on the drawing board today that says we now have to move to New Jersey,” said Mark Claster, chairman of North Shore-LIJ’s board of trustees and a partner at Carl Marks & Co., a Manhattan investment banking and advisory firm. “But if that’s what we think is strategically the best thing for us to do, that’s what we’ll do.”
May 2015 9
Medical News
Federal Research Bill Holds Promise for ‘Personalized Medicine’ in New Jersey By Andrew Kitchenman
21st Century Cures Act attracts bipartisan NJ sponsors Pallone and Lance, draws praise from researchers and industry
A
s the director of Rutgers Cancer Institute of New Jersey, Dr. Robert S. DiPaola has keenly followed the progress of a federal bill intended to spark new medical research.
Dr. Robert S. DiPaola Director, Rutgers Cancer Institute of New Jersey
One of the goals of the bill is to foster “personalized medicine,” in which treatments are tailored to meet the individual genetic profile of a patient -- an area of research in which the Rutgers institute is already a leader. After a U.S. House of Representatives committee released the bill yesterday, DiPaola summed up his response in one word. “Fantastic.” The legislation has earned rave reviews across New Jersey’s research community, as well as its biotechnology and pharmaceutical industries. They see its goals of increasing medical research funding and speeding the approval of new drugs and medical devices as essential to promoting therapies that will serve patients and promote the state’s biotech and pharma companies The importance of these industries to the state helps explain why two of the bipartisan bill’s leading House advocates are from New Jersey: U.S. Rep. Frank Pallone Jr. (D-6th), one of its four cosponsors, and U.S. Rep. Leonard Lance (R-7th). Lance sponsored a section of the bill that would ease limits on the amount of money that the Food and Drug Administration can spend to test drugs. That would increase the speed at which the FDA can approve drugs. Finding additional federal funding for medical research has grown in urgency since 2013, when a provision of federal budget law known as “sequestration” went into effect, effectively limiting the amount of money many federal programs, including the National Institutes of Health, can spend The NIH is the central source of federal funding for medical and biological research. The 21st Century Cures Act, which the House Energy & Commerce Committee passed unanimously, provides $10 billion to the NIH over the next five years and is a way around the sequestration limits. DiPaola said the innovative therapies that the Rutgers institute is researching depend on federal funding.. The more federal money that is available, the more quickly the New Brunswick-located institute can advance the research that it’s doing in conjunction with biotech and drug companies, he said. “Research funding for New Jersey is incredibly important,” said DiPaola, whose institute is the only designated National Cancer Institute center in New Jersey. Since the National Cancer Institute is part of NIH, the Rutgers institute will be eligible for the funding under the bill. There have been rapid advances in personalized medicine research in the past several years, including work at the Rutgers institute since it launched a precision medicine initiative in 2013. The institute has formed a team that includes experts who study genes at a molecular level, as well as biologists who use computers to model complex systems, and doctors who conduct clinical trials.
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“The funds that the bill would help with are federal dollars that would fuel that type or research,” DiPaola said. “It’s been much more difficult with more limitations on federal research dollars (under sequestration) – precision medicine really relies on that. In tough times we’re also relying on other sources,” including philanthropies. Debbie Hart, president and CEO of biotech trade group BioNJ, said Pallone’s and Lance’s leadership demonstrates the importance of the bill to the state, as well as to the companies that produce biologics -- therapies that are developed from living cells rather than synthesized in laboratories like most traditional drugs. “It is very encouraging, actually, the speed with which (the bill) went through and that it was unanimous,” she said. “It gives us high hopes that the industry will be supported in new and innovative ways and hopefully that new therapies and cures will get to patients who need them faster.” Pallone said that along with cancer research, he anticipates the funding will also help work to prevent infectious disease epidemics. “NIH’s budget has been consistently eroding over the last decade, but with 21st Century Cures, New Jersey and our health and research organizations would receive a critical boost,” Pallone said in a statement.
Debbie Hart Ppresident and CEO of BioNJ
The bill also includes $5 million in grants to research institutions to study ways to increase the quality and efficiency of prescription drug manufacturing. Pallone pointed to the bill as one of many that Congress has been quietly advancing in the past six months, after several years of partisan gridlock. They include measures that remove federal limits on Medicaid reimbursements and extend funding for the Children’s Health Insurance Program and community health centers. “It’s certainly the opposite of what you hear,” Pallone said last week to a gathering of the New Leaders Council, a group of self-described progressives inside and outside of government. Lance sponsored a piece of the bill known as the FDA Safety over Sequestration Act. Currently, companies pay fees that fund the FDA personnel who process applications for new drugs and medical devices. However, the sequestration spending limits apply to the FDA spending this money, which slows down the speed with which it can process applications. The provision proposed by Lance would remove the sequestration limits on the spending these industry-generated fees, allowing applications to be processed faster. Lance said in a statement that the overall bill “will help usher in a new era of collaboration among researchers, patients and physicians and those who hold the key to a new generation of healthcare innovation.” And Dean Paranicas, president and CEO of pharmaceutical trade group the HealthCare Institute of New Jersey, said the bill is “vitally important to New Jersey’s life sciences community, but more importantly, to patients around the world.” He thanked both New Jersey congressmen for their work. The bill “would accelerate the pace of discovering cures for some of the world’s most dreaded diseases. Much of that work would involve and take place right here in New Jersey, by New Jersey companies.” Paranicas singled out the provisions sponsored by Lance. “This means that new, lifesaving breakthroughs can be reviewed, approved, and delivered to patients as quickly, efficiently and safely as possible.”
Dean Paranicas President and CEO of the HealthCare Institute of New Jersey May 2015 11
Hospital Rounds
Three N.J. Hospitals Named to U.S. News ‘Common Care’ List By Beth Fitzgerald
T
hree New Jersey hospitals have been named to a new U.S. News & World Report list that recognizes hospitals for excellence in five common surgical procedures and chronic conditions.
Hackensack University Medical Center and Morristown Medical Center are among 34 hospitals nationwide that made the “Best Hospitals for Common Care” list for high performance in all five areas: hip replacement, knee replacement, heart bypass surgery, congestive heart failure and chronic obstructive pulmonary disease. University Medical Center of Princeton is one of the six hospitals nationwide that don’t offer heart bypass surgery, but were recognized for high performance in the other four procedures and conditions. U.S. News & World Report analyzed data from 4,600 medical centers and ranked hospitals primarily on outcome measures including mortality, readmissions, health care-associated infections and other widely used measures of hospital quality to determine the outcome. More than 700 earned U.S. News’ highest rating in at least one procedure or condition, with just 34 rated as high performing in all five areas. For 2014-15, Hackensack UMC was listed as the No. 1 hospital in New Jersey in the U.S. News & World Report’s Best Hospital rankings, and earned a spot among the top 30 hospitals in the nation by receiving 11 national specialty rankings. “We are pleased to be one of a select group of hospitals to offer the highest-quality complete care to our patients — in both specialty and common care. A heartfelt thank you to our physicians, nurses and the entire health care team for their continued dedication to our patients and their loved ones,” said Robert C. Garrett, chief executive of Hackensack University Health Network. Dr. David Shulkin, president of Morristown Medical Center and vice president of Atlantic Health System, said: “The new ranking by U.S. News & World Report further demonstrates how the patient care we provide has elevated Morristown Medical Center to be recognized as one of the best in the nation. “Year after year, we have made investments in our programs, facilities and technology, recruited the best and brightest physicians, nurses and staff, and focused on quality and outcomes. Through all of this and more, people around the country are beginning to take notice of Morristown Medical Center.” Barry S. Rabner, chief executive of Princeton HealthCare System, said: “Our results were gratifying because the ratings are based solely on objective data measuring important indicators of quality care, such as patient satisfaction, hospital-acquired infections and readmissions. “Our hospital is one of only 40 in the nation noted as ‘high performing’ for every procedure or condition in which we were rated. That puts us in a class with less than 1 percent of the hospitals in the country, which is significant.”
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Hospital Rounds
Latest Facility Epitomizes Summit Medical Group’s Growth, CEO’s Vision for the Future of Health Care By Tom Bergeron
S
ummit Medical Group had the grand opening of its stateof-the-art 100,000-square foot medical facility in Florham Park before numerous dignitaries Thursday afternoon. It’s a building created with the future of health care in mind, SMG officials said. The facility, which will began seeing patients Monday, will employ more than 300, handling nearly ever medical procedure that can be found in a hospital or doctor’s office. SMG officials said an imaging center, urgent care facility and ambulatory surgical center (operated jointly with Atlantic Health) will open by mid-July, pending the expected final regulatory approvals. The facility is another example of the organization’s rapidly increasing presence in the quickly changing industry. And according to its chief executive, Dr. Jeffrey LeBenger, it’s another example of why his health care philosophy works. “We are expanding on our integrated health care model,” he said. “We feel and we have proven that we can deliver on all of the quality metrics and lower the cost of health care by 8 percent.” And in this case, do it in a four-story, state-of-the art facility built by the Rockefeller Group. The facility is built with a floor plan more open than most medical facilities, one where doctors share offices and patients are often seen in sun-lit rooms facing outward. The open plan and warmth, SMG officials said, helps make these facilities more uplifting for patients and the health care providers. Even better, LeBenger said, is that patients can get so many procedures done without being admitted to a hospital. “In the future, 90 percent of medical care is going to go to ambulatory care,” he said.
once they are there, the group’s cohesiveness and organization makes it easy to practice — and with a better outcome. “There are good doctors everywhere, but there is nowhere that integrates that quality of care to all of their patients,” he said. Many, it appears, already are with SMG. The organization has more than 500 doctors in its group, operating in 60 facilities in Central and North Jersey. And while the facility will serve as an introduction to the Morris County area, LeBenger said his group has been here for a while. “We have more than 100 doctors in the county,” he said. LeBenger likes to talk about his “hub and spoke” philosophy, with centers such as the Florham Park location (not as big the group’s flagship facility in Berkeley Heights, but bigger than its new location in Livingston) working in conjunction with the dozens of smaller facilities. “We believe our integrated health care model is a one-stop shop for patients and consumers,” he said. “I feel we can we can offer the best care in (Morris) County.” The reason, he said, is because it all starts with care. “If you do what’s good for the patient, the economics will follow,” he said. “Making sure you put the patient first is always the best business model.” Michele Brown, CEO of Choose New Jersey, said SMG is a key part of the growth of the state, saying health care is a recession-proof industry, one that has added more than 100,000 jobs in the past decade. Clark Machemer, senior vice president of the Rockefeller Group, said the facility is about more than just health care.
Dr. Jeffrey LeBenger is the CEO of Summit Medical Group. - (AARON HOUSTON)
“Organizations and building such as this are so important to the community as a whole,” he said. “They lead to more development.”
LeBenger said his facilities draw doctors to the group. And
And more is coming.
14 New Jersey Physician
Dr. Jeffrey LeBenger CEO of Summit Medical Group
SMG, which has a partnership with MD Anderson, is close to announcing the location of a new cancer facility, LeBenger said. “Bringing MD Anderson into our model makes me feel we can offer a way of care to our seven counties that is by far the best care that is being offered,” he said. After that, LeBenger said, there will be the task of building another major facility in the BergenHudson-Passaic area. “Probably in the next three years,” he said. LeBenger, after all, is betting that centers such as the one that opened in Florham Park are the future. “It’s how health care is going,” he said.
May 2015 15
Hospital InsuranceRounds Issues
Meridian Partnership Bolsters its Ongoing High-Tech Health Care Device Pipeline By Beth Fitzgerald
M
eridian Health, one of New Jersey’s largest health care systems, develops digital devices to improve patient care and is seeing positive results for patients using them to keep track of their medications or to monitor their chronic ailments.
Now, Meridian is partnering with health care technology company NetScientific to speed the commercialization of its digital health care solutions and roll them out across the health care sector — to other hospital systems, drugmakers, health insurers and other health care payers. Meridian has been incubating high-tech digital health innovation in-house for the past few years, through its iMPak subsidiary. Last month, Meridian and London-based NetScientific launched a new company, Triventis Health, to combine thecloudbased information analytics of Wanda Health, a subsidiary of NetScientific, and iMPak’s user-friendly digital medical devices. Meridian and NetScientific said an initial product provides continuous monitoring and assessment of patients with congestive heart failure. Richard Sykes, chairman of London-based NetScientific, said “Keeping patients with chronic diseases out of the hospital and managed in their homes is of critical importance to all hospital groups and providers worldwide.” He said the new venture “will demonstrate how our combined expertise and technologies can improve patient well-being and reduce costs for providers.” Sal Inciardi, senior vice president of business development, Meridian Health, said: “Triventis Health is dedicated to significantly enhancing how medical care is delivered. We believe that we are uniquely positioned to enable customers to reduce the cost of health care associated with managing chronic disease, addressing what may be the greatest burden faced by most health systems around the world today.” Sandra Elliot, vice president, consumer technology, at Meridian, said iMPak “is really a kind of technology startup that we have incubated within Meridian to meet the needs of our own patient population.” One iMPak device is an electronic journal where patients with chronic conditions, like congestive heart failure, keep track of their symptoms and overall health, with the data being delivered via cloud technology to the clinical team. “The patient answers questions, usually yes or no questions, or they may be asked to enter information, like their weight,” Elliot explained. “If the patient’s symptoms get out of whack, the case manager can call the patient and make sure they’re okay, and talk to them about whether or not their diet has changed, or if there an issue with their medication.” Patients use the device to “help them manage themselves, but also help our clinicians get a line of sight to what’s going on — particularly for those patients with complex chronic conditions.” For example, a patient with pulmonary disease “has a number of very complex issues that need to be managed for them to stay as well as possible and minimize the number of times they are readmitted (to the hospital) because their condition gets out of control.” Another device Meridian has been piloting with patients helps them manage their medications. Elliot said: “Medication compliance is a huge issue because, with more complex conditions, you have to manage multiple medications. Knowing whether or not a patient is compliant with their medications, when you are looking at their symptoms and their vital signs, is very critical. Because if you’re not careful, you may prescribe more or different medications when, really, the patient just needs to be a little bit better educated on why they are taking certain medications, and taking them the right way.” 16 New Jersey Physician
Elliot said iMPak has been developing digital health technology for the past few years, and “all of them are low-cost, easyto-use devices. We’ve developed them here internally, within the health system, and we’ve spent a lot of time putting them in the hands of patients. So the patients have actually helped guide the actual design of these devices, (alongside) our clinicians, so that we can understand what is truly easy to use.” So far, about 275 Meridian patients have piloted the devices. Elliott said that, as Triventis Health ramps up, its target will be 1,000 users by the end of the third quarter of 2015, and 5,000 by the first quarter of 2016. And the goal is for Meridian patients to comprise between 10 and 15 percent of users, with the majority being new users brought on board by Triventis Health. Elliot said initial customers will include two pharmaceutical companies and two health systems, one on the East Coast and one in California. Partnering with NetScientific brings new expertise to iMPak, Elliot explained, including the ability to scale up the products and enhance them with “predictive analytics” that will help clinicians to “predict potential problems before they become problems.” She said NetScientific “is not only bringing the sales and marketing and commercialization side of the equation, they also bring the capacity of predictive analytics.” This will enable iMPak to take the data its devices gather from patients and gain “even greater insight into what is going on with the patient population, and what works and what doesn’t work.” A key advantage of digital health technology is that it keep tabs on the patient’s condition in real time, helping avoid a crisis that lands the patient back in the hospital. And that is crucial in this new health reform environment, where Medicare and other payers financially penalize hospitals for excessive patient readmissions. For that reason, a health system may decide it makes economic sense to cover the cost of providing those patients who need them with the digital health devices Triventis Health has to offer, Elliot said. “If this (technology) can reduce my readmission rate, because I can better manage the patient (after discharge), I may be able to do that at a lot less cost than the penalty I might get for a readmission rate that’s too high.” She said that has already been the experience for Meridian, which covers the cost of providing digital technology to patients and has seen a return on investment, primarily through lower readmission rates. Digital health technology holds the promise of increasing patient engagement in their own health care. “The engagement level of the patients in their overall care has increased, and you can actually see it because it changes as they start using” the devices, Elliot said. “Patients get very excited about seeing their own numbers, and seeing how well they are doing. You can actually get people much more comfortable managing their own conditions, and that is pretty spectacular.” May 2015 17
Hospital Rounds
Barnabas, VNA Health Group Form Home-Health Alliance By Beth Fitzgerald
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arnabas Health, New Jersey’s largest hospital system, and the Visiting Nurse Association Health Group have decided to partner on their journey toward a major health care reform destination: keeping patients healthy at home so they’ll spend less time in hospitals and other health care facilities. Barnabas Health Home Care and Hospice and the VNA Health Group said the goal of their partnership is “improving the quality and efficiency of post-acute care, home care and hospice in the communities they serve.” Barry H. Ostrowsky, chief executive of Barnabas Health, said, “Hospitals and home care providers must find new ways to collaborate and coordinate care to provide a more seamless patient experience, reduce unnecessary rehospitalizations, and improve health outcomes for the patients and populations we serve. This partnership will position our organizations to meet these emerging challenges, while maintaining focus on delivering the highest quality post-acute services.” Dr. Steven H. Landers, chief executive of VNA Health Group, said the partnership with Barnabas, which he expects to become final in six to 12 months, will be similar to VNA’s existing hospital joint ventures with Robert Wood Johnson University Hospital, Englewood Hospital and Medical Center and Cape Regional Medical Center. “This partnership with Barnabas Health is an opportunity to grow as an independent community agency while closely collaborating with a leading health system,” Landers said. Keith L. Boroch, chief executive of Barnabas Health Home Care and Hospice, said Barnabas had been exploring various strategies for expanding its home care services. He said Medicare and commercial health plans want hospitals to “move toward providing much more of a link to home and community-based care models, to reduce (hospital) readmissions and to improve quality of care.” One strategy could have been for Barnabas to grow its home care operations, in part via acquisitions, Boroch said. 18 New Jersey Physician
“But as we started looking at this, we looked at the potential for partnering with a high-quality organization that had a great reputation and that shared the value system of Barnabas Health — and the VNA fit that model.” He said partnering with VNA will help Barnabas provide patients the care they need to transition back home following acute and post-acute care. And it also positions Barnabas for a future in which the focus is on population health management, with health care systems taking responsibility for keeping people healthy. And this involves “helping people to be able to stay in their homes as they are either recovering from or are dealing with chronic illnesses, to be able to serve them in a much more focused, cost-effective manner in the comfort of their own homes — which is where people prefer to be.” Boroch said Barnabas Health currently has about 600 employees in its home care and hospice unit, provides home care to an average of 1,700 people daily and provides hospice care to about 400 people. Landers said VNA will continue to provide home care services on its own, as well as co-managing home care services with its joint venture partners. VNA Health Group provides home care to about 7,000 patients daily, and provides palliative and hospice care to more than 1,500 patients. Landers said, “We’re in an era where home and community care is growing in importance and where hospitals and physicians are more and more responsible for outcomes outside of the hospital.” He said the partnership with Barnabas “is an exciting development to position our organizations to succeed and to make a difference in that new reality.” Boroch said, “If you look at patients that are discharged (from hospitals) and the readmission rates of those patients, home care has better outcomes in reducing readmissions than other services.”
Right now, the two organizations have strengths in certain areas of the state; through the partnership “the patchwork that currently exists will be much more unified,” Landers said. Barnabas provides home health and hospice services in Essex, Monmouth, and Ocean counties, while VNA Health Group independently provides home care and hospice services through the Visiting Nurse Association of Central Jersey in Monmouth, Middlesex, Essex, Hudson and Burlington counties. The partnership will align the two organizations’ services in these areas. They will operate together but continue to use their current names: Barnabas Health Home Care and Hospice in northern New Jersey, primarily Essex and Hudson counties, and VNA of Central Jersey from Middlesex to the southern region of the state.
Outpatient Surgery Centers Add $3.75B To N.J. Economy, Study Finds By Beth Fitzgerald
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ew Jersey’s ambulatory surgery centers — which perform a wide range of same-day, outpatient procedures that include colon cancer screening and spine surgery — last year contributed $3.75 billion to the state’s economy and employed more than 9,000 people full-time, according to an economic impact study by the New Jersey Association of Ambulatory Surgery Centers. According to the NJAASC, the total economic impact reflects the multiplier impact from health care spending: The study found that, for every dollar spent by ASCs, $2.33 of economic value was generated. The study estimates that there are 364 ASCs in the state and that they paid about $73 million in taxes last year. The findings make the case for ASCs “as a key component of our local, state and federal health care delivery platforms,” said NJAASC President Larry Trenk. “As a critical component of New Jersey’s health care system, ASCs provide high-quality care while containing costs. In addition, they fuel the state’s economic engine by providing jobs and generating economic activity statewide.” Trenk said New Jersey’s ASCs have a total volume of about 1 million cases a year. Among the study findings: • On average, each ambulatory surgery center in New Jersey had total operating expenditures of $4.3 million, resulting in a statewide direct economic impact of $1.58 billion.
surgical procedures, including diagnostic and preventative procedures. The list of procedures done at surgery centers include knee, shoulder, spine and eye surgeries, such as cataract surgery, spinal fusion, hernia repair and shoulder arthroscopy. The report cited national estimates that about 70 percent of surgeries now occur in outpatient settings. Trenk said New Jerseyans “have become increasingly comfortable and in certain instances prefer to have procedures performed in an outpatient setting.” While years ago ASCs were seen as an alternative to hospitals, Trenk noted that in recent years hospital systems have been opening same-day surgery centers, often partnering with physicians and in some cases with national firms that develop ASCs. “More and more hospitals are choosing to partner with the physicians, and physicians believe there are a lot of synergies to be achieved by their relationship,” Trenk said. And he said while years ago, many ASCs did not participate in insurance company networks, that has changed dramatically. “It is rare that you will find centers that are exclusively out-ofnetwork,” Trenk said. Instead, centers will typically choose to join certain health plan networks and not others, depending on the level of reimbursement they are able to negotiate.
• After accounting for the multiplier impact of that direct spending and the tax revenue generated by the centers, the total impact of ASCs for 2014 was $3.75 billion. The report notes that advances in medical technology are enabling physicians to perform a wide range of same-day May 2015 19
Hospital Rounds
University Hospital EMS Earns Award from the American Heart Association By Beth Fitzgerald
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niversity Hospital Emergency Medical Services has earned a Gold Level Recognition Award from the American Heart Association. The Newark hospital is run by the state of the New Jersey and is the main teaching hospital of the Rutgers New Jersey Medical School in Newark.
The American Health Association’s Mission: Lifeline EMS Recognition honors the success of ambulance agencies and medical first responders in implementing specific quality improvement measures for treating patients who suffer the deadliest form of a heart attack, known as STEMI, which involves damage to the full thickness of the heart muscle. “Quick treatment is critical for patients with the onset of STEMI symptoms, and University Hospital EMS is proud to be recognized for the advanced emergency care we deliver to Newark and throughout Essex County,” said Dr. Gregory Sugalski, interim chief of service, Department of Emergency Medicine Medical Director at University. “The life-saving speed has benefited thousands of patients in the region and we will work to make even greater improvements.”
Barnabas Breaking Ground on $250M Expansion By Beth Fitzgerald
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aint Barnabas Medical Center in Livingston announced it will break ground Wednesday afternoon for the hospital’s most ambitious building project in more than two decades: a $250 million pavilion that “is part of the strategic vision to transform Saint Barnabas Medical Center and prepare for the future.” Barnabas Health, the state’s largest health care system, said the new Cooperman Family Pavilion will transform the hospital, creating 114 new single-patient rooms, a new and expanded Neonatal Intensive Care Unit, new Operating Room Suites, a new Interventional Radiology Center, a new Diagnostic and Testing area as well as a sweeping, lightfilled lobby and registration area. Barnabas said the five-story pavilion will increase the size of the hospital by half, adding 225,000 square feet. It also will unlock space in the medical center’s existing building. At the groundbreaking will be philanthropists Leon and Toby Cooperman, whose $25 million donation to Barnabas Health supports the building project. 20 New Jersey Physician
They will be joined at the 4:30 p.m. ground breaking by Barry H. Ostrowsky, chief executive of Barnabas Health, Dr. John F. Bonamo, chief executive of Saint Barnabas Medical Center and Richard J. Kogan, chairman of the Saint Barnabas Medical Center trustees. Barnabas Health said that, last year, nearly 32,000 area residents were admitted to Saint Barnabas Medical Center; 92,000 were treated in the hospital’s emergency department; 5,770 babies were born; and 1,000 premature and very sick babies were treated in the Neonatal Intensive Care Unit. Another 300,000 people received same-day medical tests and procedures at the medical center and the Barnabas Health Ambulatory Center. Barnabas said, “After 150 years serving the community, the hospital is preparing for the future with an ambitious new building project.”
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Hospital Rounds
Hackensack, Meridian Sign Definitive Agreement to Merge By Beth Fitzgerald
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eridian Health and Hackensack University Health Network said Tuesday they have signed a definitive agreement for the two health systems to merge into Hackensack Meridian Health and form the state’s largest health care system, with $3.4 billion in revenue. The merger announcement last Oct. 16 kicked off seven months of due diligence: a review of clinical, regulatory, service and financial issues that is now finished. The deal still needs state and federal regulatory clearance, which the health systems expect to take nine to 12 months.
“We have been at this for many years,” Lloyd said. “We are in 100 locations and have an ambulatory facility within 10 to 15 minutes of every resident (in the Meridian service area). “This did not happen overnight, we have been diversifying into the ambulatory care area for the last three or four years. We will each share our own experience about how we have developed a continuum of care so that we can accelerate the services out to the community and the patients and residents who need them.”
Once completed, Hackensack Meridian Health will have about 25,000 employees and nearly 6,000 physicians on staff.
Garrett said a goal of Hackensack Meridian Health is to have a health care center or a hospital within 10 to 15 minutes of all the residents in the seven counties the two systems cover.
And while the merger will make Hackensack Meridian Health the state’s largest health care system, it may not hold the distinction for long.
“That is a pretty lofty goal and it is the right thing to do for the citizens of New Jersey, for the access to care they are looking for,” he said.
Barnabas Health, currently the state’s largest health system with about $3 billion in revenue, is in discussions with Robert Wood Johnson Health System. That potential merger would create a system with roughly $4.5 billion in revenue.
The combined entity will have 11 hospitals — Jersey Shore University Medical Center, Neptune; Ocean Medical Center, Brick; Riverview Medical Center, Red Bank; Southern Ocean Medical Center, Manahawkin; Bayshore Community Hospital, Holmdel; Raritan Bay Medical Center, Old Bridge; Raritan Bay Medical Center, Perth Amboy; Hackensack University Medical Center, Hackensack; HackensackUMC Mountainside, Montclair; HackensackUMC at Pascack Valley, Westwood; and Palisades Medical Center, North Bergen; and, two children’s hospitals — K. Hovnanian Children’s Hospital in Neptune and Joseph M. Sanzari Children’s Hospital in Hackensack.
Hackensack University Health Network CEO Robert C. Garrett said mergers are the way of the future — and a positive for the industry. “There is no doubt that more and more health care is being delivered outside the four walls of the hospital,” he told NJBIZ. “I think consumers and business are seeing better value in the system because many of those procedures can be done on an outpatient basis. So from that perspective it has helped to curb the rising health care cost.” Once the Hackensack Meridian Health merger is fully approved, Garrett and Meridian CEO John Lloyd will serve as co-CEOs for two and a half years, after which Lloyd will retire. Garrett will then become the sole CEO. There will be a corporate board with an equal number of trustees from each system. The merged system will have 11 hospitals — but the two CEOs said during an interview with NJBIZ that they are well along in the transition to a world where the majority of health care services are delivered on an outpatient basis. 22 New Jersey Physician
The system will also have a network of physician practices, ambulatory surgery centers, home care, long-term care and assisted living facilities, ambulance services, fitness and wellness centers and outpatient centers. Both executives said the Affordable Care Act has presented both opportunities and challenges to their health care systems. The ACA, they said, has enabled several hundred thousand more New Jerseyans to be covered with health insurance, either through Medicaid or via subsidized coverage on HealthCare.gov. However, they pointed out that many consumers purchased high-deductible health plans under the
ACA, to minimize their premiums — and some have been unable to pay those deductibles, which can amount to several thousand dollars a year. That, Garrett said, is an issue. “We are seeing the bad debt increase because people are not able to financially pay their bill,” he said. Most of the state’s hospitals saw their charity care support from the state reduced this year, on the assumption that Medicaid would cover more of the cost. And while many of those previously uninsured are now covered, the business model isn’t necessarily working smoothly. “Unfortunately, hospitals, by and large, have seen a significant increase in bad debt due to the fact that more and more people have high-deductible (plans),” Garrett said. Both Garrett and Lloyd feel the merger is a step in the right direction. “We are very excited we have a great opportunity to be a leader in the state and maybe the region and nationally, with two outstanding health systems being able to integrate their strengths and be able to serve a lot of geography with a lot of ambulatory services,” Lloyd said. “Both our organizations are about patient care and we believe our patients should have access to outstanding ambulatory and inpatient care, and we want to lead the way.” Garrett said the merger is about more than just size. “It’s what each organization brings to the table,” he said. “There are mergers that are just about size but they don’t work. This is a very synergistic merger.” The head of each board agreed. Gordon Litwin, chairman of the Meridian Health board, said, “From the beginning we knew that we were embarking upon a great relationship that would have tremendous benefits to residents within our service areas and I could not be more pleased with the process that got us here today, which will, in the end, create one of the most comprehensive patient-focused and quality-driven health care systems in the state.” Joseph Simunovich, chairman of the board of HUHN, agreed. “This period of due diligence has affirmed that our combined organizations will expand access to services and further develop a vast array of new hospital services to much broader geography,” he said.
May 2015 23
24 New Jersey Physician