Atlantic Health System and Hunterdon Healthcare System have announced they have signed a letter of intent to form a jointly owned health care company. The two systems will remain independent, but work together on health care initiatives in Hunterdon, Somerset, Mercer and Warren counties.
The not-yet-named company will increase the scope of offerings at Hunterdon's medical center and its physician groups; give Hunterdon doctors and patients access to clinical trials being performed at Atlantic's facilities; and create cost-efficient ways to purchase supplies and implement information technology for both systems.
Dr. George Roksvaag, chief medical officer for Hunterdon, said not all of the roles have been fleshed out yet for the new company, but the two systems hope to have a more specific definitive agreement in place within the next several months.
Atlantic CEO Joe Trunfio said the alliance allows Atlantic to meet "our partners where their needs are," and the partnership "clearly makes sense" as the best fit for both systems. He added that coordinating services like ambulance transportation and home care can become even more efficient when scaled up.
The announcement is the culmination of a long process for Hunterdon Healthcare, which includes a medical center in Flemington and many physician practices. The system has been entertaining partnership ideas for roughly a year.
Atlantic Health — which consists of Overlook, Morristown and Newton medical centers and the Goryeb Children's Hospital — has been aggressive in expanding its geographic presence in the state. Atlantic has answered requests for proposals from independent hospitals throughout North and Central Jersey.
Roksvaag said the alliance will not affect Hunterdon's current accountable-care organization or patient-centered medical home initiatives, but may in the future open up opportunities for Hunterdon and Atlantic to work together on creating a coordinated-care partnership.
"Many of the new arrangements trying to look at taking on accountable care require a critical mass," Roksvaag said. "Hunterdon, as successful as we've been, is not really big ... so we're looking to get some of the advantages of being aligned with a bigger system."
Trunfio said the partnership gives Atlantic access to Hunterdon's growing presence outside of its traditional market through Hunterdon's physician practices and tertiary referrals.
Hunterdon has referred patients to Atlantic's hospitals for tertiary care for many years, and Roksvaag said the agreement builds upon that history. And unlike many of the independent hospitals looking to consolidate, Roksvaag said Hunterdon's strong financial success meant the system could put together criteria for strengthening the system while maintaining independence.
Roksvaag said Hunterdon had the second-largest operating margin of hospitals in New Jersey as of the end of June. Trunfio said that the fact that Hunterdon did not need a partner for immediate financial resources enabled the unique structure of the alliance, adding that an "arm's length" relationship doesn't traditionally allow for much financial investment.