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Paving the way for a reopening at shuttered hospital in Pascack Valley

Westwood facility's long saga ends June 1 as Hackensack, for-profit operator officially take the reins

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Chad Melton, CEO, Hackensack University Medical Center at Pascack Valley.
Chad Melton, CEO, Hackensack University Medical Center at Pascack Valley. - (AARON HOUSTON)

A new Bergen County hospital that opens June 1 will be both the clinical and financial offspring of its joint-venture parents — Hackensack University Medical Center and the for-profit LHP Hospital Group — executives from both institutions promised last week during a tour of the $148 million facility that replaces the former Pascack Valley Hospital.

As a for-profit, HackensackUMC at Pascack Valley will pay more than $1 million a year in property taxes, while its physicians — including specialists like neurosurgeons not typically found at a community hospital — benefit from Hackensack's large and growing clinical network, executives said.

Chad Melton, an executive of Plano, Texas-based LHP who become chief executive of the new hospital a year ago, said partnering with Hackensack means "we have the resources to provide a higher level of care than most community hospitals." He said 23 neurosurgeons have applied for privileges at Pascack Valley, which will also have thoracic surgeons and surgical oncologists on staff. Melton said the hospital will be able to handle specialized surgeries, with the more complex cases being referred to Hackensack.

Melton said the old hospital, which went bankrupt and closed in 2007, had fewer than 300 physicians, while more than 600 physicians are seeking credentials to practice at Hackensack UMC at Pascack Valley. In addition, the new hospital expects to have about 500 employees by year end.

The new hospital has 128 beds, all in private rooms, while the former hospital was licensed for 291 beds.

Robert C. Garrett is president and CEO of Hackensack University Health Network, which last year also acquired the 365-bed Mountainside Hospital in Montclair in a joint venture with LHP. While LHP is running day-to-day operations, "it really is a collaborative joint venture," he said. "We are seeking clinical integration: Hackensack quality standards will be met here."

LHP put up the majority of the capital for both Pascack Valley and Mountainside "which preserves capital back at our flagship hospital to develop services and programs back there," Garrett said. "We have the best of both worlds: we can expand our network by acquiring hospitals with the help of a partner, and at the end of the day we are still very involved with the governance of those hospitals."

The new hospital faced strong opposition from the Valley Hospital, in Ridgewood, and Englewood Hospital and Medical Center, both of which waged an unsuccessful court fight to block the reopening of Pascack Valley, arguing there was already excess hospital-bed capacity in the region. During his campaign, Gov. Chris Christie came to Westwood and vowed to reopen the hospital.

Dan Moen, chief executive of LHP, said, "I view the opposition as normal, from institutions trying to protect their territory. But there is plenty of room for all three hospitals. The geography is such that to go five or six miles can take 45 minutes at a busy time of day, and in our business, an extra minute can make a big difference in an emergency."

Asked to comment on Pascack Valley, Warren Geller, chief executive of Englewood Hospital and Medical Center, said in a statement: "We are dedicated and committed to meeting the health care needs of the people in this region. We, too, are excited about our growth and expansion plans, as needs and demand for health care services continue to increase."

Health care experts blamed Pascack Valley's failure on debts from a major renovation, and the decision to drop out of the Horizon Blue Cross Blue Shield network, which Melton said had accounted for more than 16 percent of the hospital's revenues. He said the new hospital is in all the same health insurance networks Hackensack participates in, including Horizon.

Moen said Pascack Valley will treat patients regardless of their ability to pay, as required by law regardless of whether a hospital is for profit or a nonprofit, and he noted that seven of the 10 members of the joint venture board are community members or physicians.

Jeff Brown, chief of staff for the New Jersey Health Care Quality Institute, said "Hackensack is a great hospital that gets high marks for patient safety." He said the partnership with LHP "is emblematic of where we are going in health care, not only in New Jersey but elsewhere. We are definitely moving in the direction of partnerships between different health care entities."

E-mail to: beth@njbiz.com
On Twitter: @bethfitzgerald8

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Beth Fitzgerald

Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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