Some 3,000 miles east of Los Angeles, another hospital is looking for financial help. Five local and national healthcare operators are vying to take over adult and pediatric healthcare services at Newark, N.J.-based United Health System.
At deadline, United's management and medical staff, with financial adviser Cain Brothers & Co., were reviewing bids with the goal of selecting a partner. United hadn't disclosed financial or operational terms of the various proposals.
The request for proposals seeks an affiliation or sale to maintain pediatric healthcare services in Newark and provide for United's continued provision of adult healthcare services. Bidders include locally based not-for-profit hospitals as well as privately held Medical Management of America, Chicago, and Primary Health Systems, Wayne, Pa.
Primary Health submitted a joint proposal with Jersey City (N.J.) Medical Center.
Cathedral Healthcare System and University of Medicine and Dentistry of New Jersey, both of Newark, submitted a joint bid. Saint Barnabas Health Care System, Livingston, N.J., and First Medical Corp., Long Island, N.Y., also bid on the project.
United is primarily known for its Children's Hospital of New Jersey, a regional referral center for pediatric care offering a full array of children's specialty services such as open-heart surgery and neonatal intensive care.
After failing to make payroll late last month, the financially troubled acute-care hospital requested proposals from potential partners or owners. United subsequently made good on its $2 million biweekly payroll with a $3 million advance on charity-care subsidies from the state. Pressed for cash as well as supplies, United closed its emergency room for 21/2 days, causing a decline in patient census. With $50 million of debt including payments owed to vendors, its fiscal legs remain wobbly.
As one of the largest providers of hospital-based charity-care services in the state, United incurred $35 million in unpaid care and bad debt last year. In previous years, much of its charity-care tab was offset by subsidies from the state. Because of changes in the payment formula, it now receives only a third of what it spends, a spokeswoman said.