New Jersey hospital systems that were running into each other's arms are now running the other way, deciding that bigger is not necessarily better, especially when they're incompatible.
Six-hospital Atlantic Health System, based in Florham Park, N.J., and eight-hospital Robert Wood Johnson Health System, based in New Brunswick, N.J., said last week they have abandoned plans to merge into what would have been the state's largest healthcare organization.
And separately last week, Via Caritas Health System, a 2-year-old network of New Jersey Roman Catholic hospitals, confirmed that it's about to dissolve.
They joined several other hospital systems across the country last week that acknowledged merging doesn't always produce the promised results (See stories, p. 20 and p. 28).
The alliance between Atlantic Health and Robert Wood Johnson, first announced by both systems last June, would have created an organization slightly larger than Saint Barnabas Health Care System in Livingston, N.J. The merged system would have had 14 hospitals in 11 of the state's 21 counties (June 29, 1998, p. 46).
"I think we're all finding out that bigger is not necessarily better," said Harvey Holzberg, Robert Wood Johnson's president and chief executive officer. "People no longer perceive these big systems as being community-sensitive."
Richard Oths, president and CEO of Atlantic, said the split grew out of differences of opinion on the "breadth and depth of integration," and disagreements over how the two would merge.
Before merger talks fell apart, the plan was for Oths to become CEO of the system with Holzberg as chief operating officer, said Michelle Lazzarotti, spokeswoman for Atlantic Health.
Holzberg said the Robert Wood Johnson hospitals are more autonomous than the fully integrated Atlantic Health hospitals.
Robert Wood Johnson partners with the University of Medicine and Dentistry of New Jersey-Robert Wood Johnson Medical School.
Both CEOs said one reason the alliance failed was a difference in missions. Robert Wood Johnson emphasizes its teaching hospital, and Atlantic focuses on its ties to the community.
Robert Wood Johnson system's flagship hospital is 430-bed Robert Wood Johnson University Hospital in New Brunswick. Atlantic's largest hospital is 575-bed Morristown (N.J.) Memorial Hospital.
Meanwhile, Via Caritas, based in Parsippany, N.J., will dissolve within the next few weeks because it could not draw enough hospitals, said Sister Jane Frances Brady, who chairs the system's board and is also CEO of St. Joseph's Hospital and Medical Center in Paterson, N.J., a member hospital.
"We hoped for nine or 10 institutions, and we ended up with three," she said.
The other two network members are St. Clare's Health Services, formerly Northwest Covenant Medical Center, in Denville, N.J., and St. Mary's Hospital in Passaic, N.J.
Brady said cost-effectiveness could not be achieved with only three members. The hospitals will continue to function independently with some joint programs, and there will be no layoffs, she said.