Dive Brief:
- Nonprofit health system CarePoint Health and for-profit Hudson Regional Hospital signed a letter of intent last week to form a new regional healthcare management system in northern New Jersey.
- Yan Moshe, Hudson’s owner, will serve as the new organization’s chairman and Achintya Moulick, CarePoint Health’s CEO, will be chief executive and president of the new group, Hudson Health, according to the announcement.
- The deal, which is subject to regulatory approval, follows CarePoint’s petition for a $130 million bailout from the state. The nonprofit said in a petition last month that charity care obligations and inflation had created “unprecedented challenges” that threaten the financial survival of its hospitals.
Dive Insight:
Hudson Health would include CarePoint’s Bayonne Medical Center, Christ Hospital in Jersey City, Hoboken University Medical Center and Hudson Regional Hospital in Secaucus.
CarePoint's hospitals would continue to operate as nonprofits under the deal, and all locations would keep existing contracts with major insurers, according to the news release. The systems did not disclose financial terms of the deal.
Multiple New Jersey politicians, including Jersey City Mayor Steven Fulop and Secaucus Mayor Michael Gonnelli support the merger, saying in statements last week that the deal will provide needed resources for patient care.
The proposed combination comes after CarePoint’s finances have raised concerns among state regulators and industry stakeholders.
In October, the New Jersey Department of Health sent a letter to state lawmakers warning that CarePoint’s Hoboken University Medical Center was “in financial distress or at risk of financial distress.”
The hospital had been operating at a significant loss in 2023 and was carrying less than a month of cash on hand, according to the department. In comparison, most nonprofit hospitals nationwide carried at least 150 days of cash on hand in 2022, according to a recent analysis by KFF.
In mid-April, CarePoint requested an advance on charity care subsidies from the state, citing “cashflow and other financial issues.” It was the second year in a row the system asked for an advance, the department said.
The merger comes after nearly 40% of health system mergers and acquisitions announced in the third quarter of 2023 were driven by financial distress, according to an October report from Kaufman Hall.
