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Atlantic Health continues growth strategy with Chilton merger

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Atlantic CEO Joseph Trunfio. (File photo)
Atlantic CEO Joseph Trunfio. (File photo)

Before the ink had dried on a letter of intent to form a joint venture with Hunterdon Healthcare System, Atlantic Health announced today another addition to the system's rapidly growing network.

Atlantic has welcomed Chilton Hospital into the fold, joining Morristown, Overlook and Newton Medical Centers and the Goryeb Children's Hospital. The system has been looking to grow its geographical footprint for more than a year, and answered several requests for proposals from independent hospitals around the state looking for a partner.

In a conference call with reporters this morning, Joseph Trunfio, CEO of Atlantic Health, said the addition of Chilton was the result of several years of "evaluating independence."

"This is a natural fit," Trunfio said. "This will advance care in northern Jersey."

Chilton CEO Deborah Zastocki said the merger takes "proactive steps to remain a vital resource and strengthen(s) our ability to offer access to more tertiary services."

Trunfio said Atlantic will assume $45 million in debt from Chilton, and commit an as-yet-determined amount to building and expanding Chilton's services and facilities. He added that Chilton was an attractive partner not necessarily because of solely financial reasons, but the opportunities to almost immediately add physicians and patients to Atlantic's network.

Zastocki said combining oncology services is a particular area of strength for the merged systems, and the Chilton physicians are looking forward to joining Atlantic's large accountable-care organization. Zastocki said Chilton has previously contracted with Atlantic to provide perinatology, neonatology and cardiology services at Chilton.

Chilton will retain its name, and the hospital's foundation will remain intact for fundraising purposes. Zastocki said the merger was not a financial "lifeline" to Chilton, but an expansion of services to keep the hospital successful. She said the hospital's financials have improved recently, with increased volume and nearly complete renovations that will make 65 percent of its rooms private.

Trunfio said the expansion to the Pompton Plains community is key for Atlantic to succeed in population health management, and efficiencies in ambulatory and post-acute care will be created between Chilton and Atlantic. The merger also will give Atlantic another location to expand its family medicine residency program. Earlier this year, Atlantic was given 32 additional graduate medical education slots through reallocation, and formed a family medicine residency program.

Trunfio said the next step is to seek state and federal approval, which could take up to nine months, as well as creating a multiple-year strategic plan for Chilton to become part of the system. By keeping Chilton as a comprehensive acute-care facility, Zastocki said it is unlikely that service lines — and clinical staff — will be cut as a result of the merger; more efficiencies are expected to be found in "back office" personnel. Those decisions will be made in the strategic planning process.

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