Trinitas Regional Medical Center signed a letter of intent to join RWJBarnabas Health, the New Jersey-based Catholic hospital and not-for-profit health system announced Thursday.
Under the letter of intent, RWJBarnabas will become the corporate parent of Trinitas and invest in the 554-bed acute care teaching hospital, with plans to expand its outpatient network. RWJBarnabas will gain access to eastern Union County, which executives say will bolster the northern and central New Jersey healthcare network.
"Trinitas is a vital resource to the eastern Union County community, and through this agreement we would greatly expand our reach into new communities with our mission of improving the health and well-being of its residents," Barry Ostrowsky, president and CEO of RWJBarnabas, said in a statement.
Trinitas will remain a Catholic institution and will abide by the Catholic religious directives, which limit certain services to women, LGBTQ patients and those seeking physician aid in dying, among others. The Sisters of Charity of Saint Elizabeth will remain the Catholic sponsor of Trinitas and the Elizabethtown Healthcare Foundation will continue to support not-for-profit organizations in Union County, including RWJBH/Trinitas. The Trinitas board will maintain oversight over day-to-day operations of Trinitas, according to the letter of intent.
They expect to reach a definitive agreement before the end of the year and will need approvals from state and federal officials and the Catholic church before the deal is finalized.
The New Jersey market continues to consolidate as healthcare executives claim that scale is necessary to keep costs down, boost their leverage with payers and improve care. Economists contend that healthcare costs typically increase following mergers and acquisitions as health systems often raise prices and struggle to eliminate redundancy and streamline operations.
The 11-hospital academic health system RWJBarnabas reported an operating income of $215.2 million on revenue of $5.35 billion in 2018, down from $254 million of operating income on $5.07 billion of revenue in 2017, according to Modern Healthcare's financial database.
Elizabeth, N.J.-based Trinitas reported an operating income of $2.6 million on revenue of $299.7 million in 2018, down from $5.1 million of operating income on $296.8 million of revenue in 2017.