A lot is riding on New Jersey's decision to add four new open-heart surgery programs in the state.
The state says it made the call for CON applications to expand minority access to cardiac services. But its decision has far-reaching financial, quality-of-care and political implications:
Offering open-heart surgery carries great prestige and promises handsome returns, providers acknowledge. State approval could profoundly improve the fortunes of the hospitals and health systems selected because such programs can generate multimillions of dollars in revenues.
Adding new open-heart surgery programs in the suburbs could draw patients away from existing programs at urban hospitals, which rely on those revenues to help support total operations.
Increasing the number of open-heart programs statewide to 18 from 14 could harm patient outcomes, critics believe. National cardiac-care studies demonstrate that providers who perform more procedures have better outcomes. Although the state is raising the minimum number of procedures a hospital must perform in a year to 350 from 250, patient quality experts are skeptical.
"In a state like New Jersey where you can go from (border to border) in about 21/2 hours . . . why do we need more?" asks Lou Marturana, managing director of the New Jersey Health Care Quality Institute, a not-for-profit spinoff of a New Jersey-based payer coalition.
In deciding to call for new open-heart programs, the state has launched a political hot potato. It is widely believed that regulators are catering to the desires of Livingston, N.J.-based Saint Barnabas Health Care System and its powerful president and chief executive officer, Ronald Del Mauro.
New Jersey regulators believe the state's certificate-of-need program has largely outlasted its usefulness and now favor a market-based approach. Under a bill signed by the governor this month, the state is eliminating CON reviews in phases (July 6, p. 21). Reviews of big-ticket items like heart surgery services remain in place until a special commission has studied the issue.
To appreciate the political implications of the open-heart competition, you need to understand the dynamics of New Jersey's healthcare market. Healthcare system development and consolidation have moved at a speedy pace in the Garden State. By 2000, nearly every hospital in the state will be aligned with three to six major systems, observers say. The New Jersey Hospital Association's healthcare directory lists 15 systems.
Del Mauro heads what is now the state's largest healthcare system, with 10 hospitals statewide. But its suburban flagship, 615-bed Saint Barnabas Medical Center in Livingston, lacks an open-heart program. Del Mauro considers that to be a critical piece of the integrated delivery system he is building.
In 1995 Saint Barnabas acquired 451-bed Newark (N.J.) Beth Israel Medical Center, which operates an open-heart program. Some say the open-heart services were Beth Israel's most valuable asset and the reason Saint Barnabas acquired the troubled hospital. However, the number of heart procedures performed there is slumping, state statistics show.
Fast forward to 1998. In February, State Health Commissioner Len Fishman announced that the state would put out a call for new open-heart programs.
One CON call went to 12 hospitals that have CONs to provide cardiac catheterization services but no authorization to offer open-heart surgeries. All 12 have applied for permission to add the service. The state plans to award two CONs. One of the 12 is 510-bed Community Medical Center in Toms River, N.J., part of the Saint Barnabas system.
The state also plans to award two CONs under a pilot program called the Inner City Cardiac Satellite Demonstration Project. Under that program, an inner-city hospital licensed to provide cardiac surgery may partner with a nonurban provider within its own system to establish a suburban satellite. Revenues generated at the satellite must be plowed back into the urban provider's operations. But if the urban hospital's volume slips more than 20% in a year, the satellite will be discontinued.
Saint Barnabas suggested the idea for the pilot project.
"We've acknowledged that this was an idea that they brought to our attention," says Anne Weiss, a senior assistant commissioner in New Jersey's Department of Health and Senior Services. The pilot program, she says, "was an attempt to bring together two realities": There are systems in the state that have urban and suburban providers, and many patients and referring physicians are no longer using inner-city sites.
Of the four new CONs up for grabs, Saint Barnabas is expected to win two. But Del Mauro dismisses critics who say the state is bowing to pressure from Saint Barnabas. "I just laid the facts out, and they presented this program," he says.
At its peak, Saint Barnabas' Newark Beth Israel was performing 1,200 open-heart surgeries a year. Volume slipped to 394 in 1996, according to a state report. This year the hospital will do 650 to 700, Del Mauro says.
Among other contenders, observers say 448-bed Atlantic City (N.J.) Medical Center has a great shot at landing a CON because of its location. President and CEO David Tilton says the next closest provider is a 50-minute drive away. Another front-runner, according to healthcare executives in the state, is 266-bed St. Elizabeth Hospital in Elizabeth, N.J., because of its service to minorities and high volume of cardiac services.