Scott Kobler is a prominent health care lawyer at McCarter & English in Newark who has been in the industry for more than 30 years. He is also on the boards of NJTV and the New Jersey Symphony Orchestra, and has been with the Newark Alliance since its founding.
NJBIZ: How did you get involved in health care law?
Scott Kobler: Originally, through the financial side. What you learn fairly early on is that financing is an integral component of the activities of health care institutions and other institutions. Health care naturally came out of the finance side because of the institutions of bonds and incurring debt. Health care is finance, charitable organizations, tax, pensions, labor; it’s what I’ll call pure health care, so it will be the regulatory side, the physician alignment side, the joint venture side, the Affordable Care Act side, drug purchasing, insurance coverage, captive insurance, property tax, construction, bankruptcy and chancery because of mergers and acquisitions. You have to know a lot about a lot of things. You are a bit of an air traffic controller for all of these areas. I’ve done so many deals that, within and outside of New Jersey, I feel like I’ve seen (a new deal) before.
NJBIZ: What are some of the most active areas?
SK: Real estate is always hot. I’ve witnessed a — obviously, there’s a lot of consolidation. I think that has moved in the direction of financial and clinical strength. There was a time where you would go to New York or Philadelphia. Now, that’s not the case.
There are fabulous centers of excellence in the state. New medical schools have opened or are opening. There is much less of the unaffiliated, standalone hospitals. But even with those, there is an evolution of services — like not looking at lengthy hospital stays. I know people say health care costs are escalating. I’m not an economist, but I think when you match the improvement in clinical treatments in the state, there are a lot of fabulous places to go, lots of improvement.
NJBIZ: You have been involved in some of the key health care mergers in the state; what are things that signal a strong merger based on your experience?
SK: There are multiple levels of success. When you actually do a merger, the legal test is, has the acquiree, or big system, shepherded charitable assets properly. In the (Community Health Care Assets Protection Act) process, there is a diminution in delivery of service. That’s a moving target, because population health is less about building a big hospital — which you will always need — rather than delivery of service. What I learn from a person like Barry Ostrowsky is our competition may be Walgreens or CVS Pharmacy, because someone won’t have to go to an urgent care center or ER. Delivery of health care is being handled very differently. I don’t live like my grandparents. I don’t eat what they ate, my level of activity is not what they did, it’s much stronger. My stress is probably more. But a successful health care facility has a clear capacity to negotiate with the payors, and you wind up in an OMNIA situation and relationships rather than fight with each other. Then, there is a procurement. Synthesizing procurement, management and increasing the balance sheet, you repurpose. Some hospitals are in tougher places who can’t renew their fiscal plan. Some may have a lifespan of 5-10 years as an acute care hospital. But others have a lifetime. What does an acute care hospital look like in 10 years?
“What you learn fairly early on is that financing is an integral component of the activities of health care.”
NJBIZ: What would you say to a young person entering the profession today? What are some of the lessons you have learned?
SK: You need to know what you know, and you need to know what you don’t know. Clients do not want to pay for wheels that have been invented. But if you haven’t seen it before or if no one else has done it, they want your recommendation on who the best person is. I think there was so much more promise (before), but I’m not sure about the law. I would tell them to think about health care administration, because I think being in the forefront of delivery is going to be extremely exciting. I look at the law, I’ve got a body of knowledge, but it’s not in code. It’s not encoded, you could figure it out. You want the doctor who has seen stuff a lot but also want a young doctor trained in the modern methods. That’s how I approach lawyering.
NJBIZ: New Jersey is a densely populated state, but there are a few key people running it. Does that affect newcomers in the health care industry?
SK: You will get noticed. In New York, there may be multiple specialists; over here, there may not be a lot. I think that lends itself to the same people who invariably look at each other and say, would you like to be on this board or help this cause — we all know one another and help one another. Is that always healthy? I don’t know. It’s always important to invite in fresh ideas, but it’s also healthy to have institutional knowledge.
NJBIZ: How do you balance work and home life?
SK: We are a compact family of three — wife and daughter. I never moved to practice in New York; I was always close to home. I was there for everything, I didn’t miss anything. My daughter has cool parents; my wife is a Braille-er. She transcribes Braille for the American Red Cross, and began volunteering there after my daughter went off to college. My wife is incredible and focused when she wants to be. So, I tell people I did a $5 billion deal and they say, OK, but when I say my wife is a Braille-er, they are more impressed. But I balance home life because I’m not out a lot, and most of my scope is geographic. Being on boards isn’t very time-consuming. The symphony and TV were time-consuming when I was chairman, but I didn’t travel. Traveling out of state takes time. People with night meetings or travel have it tough. I’ve been doing this for 34 years. I’ve been involved in public TV for 25 years and the symphony board for over 20 years.
E-mail to: firstname.lastname@example.org
On Twitter: @anjkhem