Presbyterian Hospital, the patient-care arm of New York's venerable Columbia-Presbyterian Medical Center, intends to expand its managed-care contracting network through a corporate partnership with Palisades Medical Center in New Jersey's Hudson County.
It's the first corporate linkage of New York City and New Jersey hospitals. The institutions hope to complete the deal by Nov. 30.
"We believe that northern New Jersey is a very important market for us to have institutions linked to our medical center," said Marc H. Lory, Presbyterian's chief operating officer and president of its regional health system. The 202-bed Palisades General Hospital and its 290-bed nursing home "make us more marketable" to managed-care payers, he said.
Under a letter of intent announced last week, Presbyterian and Palisades will create a "bridge" corporation headed by a joint board, with Presbyterian taking 60% of the seats.
The new board will approve a strategic plan and any necessary borrowing, said Bruce Markowitz, Palisades' president and chief executive officer.
However, Palisades' parent corporation retains local control over hospital and nursing home operations.
The corporate linkage does not involve a full merger of assets "because the hospital wanted to have a high degree of local control and involvement in our community," Markowitz said. However, executives at both institutions acknowledged the possibility that the corporate relationship could lead to a merger.
As part of the agreement, the hospitals hope to reduce operating costs through shared services, group purchasing and common information systems.
Citing a confidentiality agreement, Lory said he could not discuss specific new programs or strategies the two institutions may pursue.
In 1995, Palisades posted net income of $1.1 million on net patient service revenues of $68 million, Markowitz said. Presbyterian recorded a net loss of $1.9 million on $747.8 million of net patient service revenues last year, but it expects to show a significant profit for the first six months of this year.