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Health department launches independent probe at University Hospital

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NJDOH Commissioner Shereef Elnahal appointed health industry insider Judy Persichilli to serve as the monitor to oversee University Hospital in Newark.
NJDOH Commissioner Shereef Elnahal appointed health industry insider Judy Persichilli to serve as the monitor to oversee University Hospital in Newark. - ()

The state Department of Health is installing an independent monitor to oversee University Hospital in Newark following the facility’s four-time credit rating downgrade, its failing grade on health care quality and a controversial plan to drastically cut its pediatric unit.

Gov. Phil Murphy, in an executive order he signed Friday, said the hospital was in dire need of an independent monitor to review its expenditures and assess its level of care.

“Given the scope of the problems found at University Hospital, these immediate actions are necessary to ensure the facility can continue providing the highest level of care to the community while it gets its fiscal house in order and improves its health care quality,” Murphy wrote in a statement accompanying the order.

New Jersey Department of Health Commissioner Shereef Elnahal appointed health industry insider Judy Persichilli to serve as the monitor, according to the announcement

She’ll have access to the upper echelons of the hospital’s inner workings, including its finances, strategic plans, administrative decision, senior management and health care practices.

Persichilli also will sit on all board of directors meetings, have access to any group or individual board briefings and probe why the hospital attempted to close its pediatric unit.

"In the last several years, University Hospital has taken a variety of steps to address financial challenges while providing access to high-quality care for all patients," University Hospital CEO John Kastanis said in a statement in response to the executive order. "We recognize there is much work left to be done and look forward to working collaboratively with Ms. Persichilli, as well as our state and local elected officials and regulatory agencies, to accelerate progress at University Hospital."

In its biannual hospital safety ratings issued in April, the nationwide Leapfrog Group gave University Hospital its lowest grade possible, an “F,” for its safety conditions.

Then in July, Fitch Ratings, one of the three Wall Street credit rating agencies, downgraded the hospital’s rating from BB- to BBB, affecting about $255 million in debt.

And while the hospital’s application to close its Emergency Pediatric and Pediatric Intensive Care units was pending, management abruptly unveiled its controversial plan in May to wind down the number of children’s beds, transferring them to Newark Beth Israel three miles away.  

“These unauthorized steps jeopardized care for pediatric patients and threatened the hospital’s ability to provide essential health care services for surrounding communities,” the Friday statement reads.

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Daniel J. Munoz

Daniel J. Munoz


Daniel Munoz covers politics and state government for NJBIZ. You can contact him at dmunoz@njbiz.com.

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