A note board in Jonathan Metsch's office at Jersey City (N.J.) Medical Center records these events under the heading "1996": Blizzard, JCAHO, Train Wreck, LOS (length of stay), Charity Care/HRF (hospital relief fund).
By mid-March, the medical center had survived a record snowfall, an inspection by the Joint Commission on Accreditation of Healthcare Organizations, the challenge of caring for injured New Jersey Transit commuters, persistently high lengths of stay, and a stoppage of state charity-care and hospital relief subsidies.
Fortunately for management of Jersey City and its parent, Liberty HealthCare System, the list of things that are going right runs longer.
On Valentine's Day, Metsch, president and chief executive officer of Liberty and its Jersey City flagship, sent a letter to board members describing a "confidentiality agreement" with Columbia/HCA Healthcare Corp. to study a joint venture (March 11, p. 4). During the 60-day agreement, Metsch said executives would determine whether such a deal could help achieve construction of a new Jersey City Medical Center.
Although the agreement has technically lapsed, discussions continue and executives expect to secure a 30-day extension, which would preclude Columbia from talking to other hospitals in Hudson County, N.J., and the surrounding five-county region.
If Columbia inks an agreement with Liberty, it would become the first for-profit acute-care chain to put down roots in the Garden State. Through Columbia, Liberty would get access to public equity. Some $150 million is needed to build a 300-bed replacement facility for which a certificate-of-need application was approved nine years ago.
Since becoming CEO in 1989, Metsch has orchestrated a quiet transformation of the struggling Jersey City facility into a diversified healthcare system. Today, the three-hospital Liberty system, which includes Greenville Hospital in Jersey City and Meadowlands Hospital Medical Center in Secaucus, N.J., operates solidly in the black.
Jersey City, with 388 beds, recorded net income of $4.9 million on net patient revenues of $151.3 million, according to 1994 data provided by HCIA, the Baltimore-based healthcare information company.
The hospital's checkered past makes recent successes appear even more remarkable. On Feb. 10, 1983, Jersey City, then a public hospital, filed "a petition for the adjustment of debts" under Chapter 9 of the U.S. Bankruptcy Code. According to an auditor's report, the medical center recorded an operating loss of $11.3 million in 1982. It noted that the medical center "may be unable to continue in existence."
After years of dealing with disgruntled creditors and pursuing rate appeals, the hospital completed payments to creditors in December 1987, and on Jan. 1, 1988, converted to voluntary, not-for-profit status. All assets and liabilities were assumed by the newly established Jersey City Health Care Corp., now Liberty.
In 1991, executives established a foundation to help "change the perception and raise the image of the hospital in the community," Metsch said. In 1993, Liberty created LHS Receivable Corp. to improve system cash flow and create additional income by selling its services to other institutions.
The following year, the system privatized the city's home-care agency and obtained an HMO license. The 11,000-enrollee Liberty Health Plan, which cost $1.5 million to put in place, is just beginning to break even, Metsch said. Last year, the system's management services organization began acquiring and managing physician practices. With 60 physicians on board, the system is approaching its goal of 100 doctor alliances.
Liberty also has expanded its reach through an alliance with New York's Mount Sinai Health System, which covers metropolitan New York and surrounding areas.
Metsch said he's not banking on Columbia to achieve system objectives, such as rebuilding Jersey City Medical Center. "We think that they're talking to us is a sign that we have value."