Solaris CEO: No Money for Muhlenberg
“I wish Muhlenberg had the funds to get through this crisis, but it doesn’t,” said John McGee, chief executive officer of Solaris Health Systems, which acquired Muhlenberg in 2007.
Negative forces include the burden of uncompensated care for illegal immigrants, low reimbursements for Medicare and Medicaid programs and battles with insurance companies for payment, presenters said. Muhlenberg not only has an $18 million deficit, but was bolstered by $22 million in loans from Solaris partner JFK Medical Center.
The decision to close the hospital still rests with Heather Howard, commissioner of the state Department of Health and Senior Services. A hearing set for May 6 will allow residents of Plainfield and neighboring towns to give testimony on why the hospital should not close. Howard could not take part Monday, but Deputy Commissioner William Conroy was present to answer council questions.
The litany of why the hospital could not remain viable was compelling, but council members’ questions still probed the possibilities of a sale to an outside entity. However, a buyer would have to prove not only having the wherewithal for a sale, but also the ability to operate the hospital and deal with the financial obligations.
If it lost acute care functions, Muhlenberg would still retain numerous services, including a satellite emergency room, imaging and lab services, the school of nursing, its mobile intensive care ambulance, and non-clinical functions such as retention of medical records. A new transportation service would be added, McGee said.
“Our first priority is getting through the process,” he said.
The hospital’s closing costs have been tabbed at $70 million. Of about 1,000 jobs, only 300 might be saved.
City Council members raised numerous questions about the closing and pressed for some way to save the hospital.
“This community’s hurting,” Councilman Rashid Burney said. “This is our family. Muhlenberg is our crown jewel. We don’t want to see it go.”
But McGee’s responses all came back to the same bottom line. The hospital was not only losing money each year, it owed $22 million to JFK Medical Center for cash infusions to keep it afloat. The debt was causing bond insurers to threaten JFK. Since 1997, when state hospital grants went flat, 18 hospitals closed.
“There’s no money,” McGee said.
A task force formed by Assemblyman Jerry Green has been working with area hospitals and other entities to deal with effects of the closing. Jay Jiminez of St. Peter’s Health Care said a gap exists in services including obstetrical care, mental health and primary care. Five sub-committees are still studying ways to address the gap as well as transportation issues and loss of employment.
Although Green and McGee both professed respect for each other, Green still called for a probe of Solaris financial records and the role of the past city administration in addressing the hospital’s mounting problems since 1997.
After the presentation, residents spoke out against the closing.
“It’s a sad day today for the poor people,” Nancy Piwowar said, noting Muhlenberg began as a free hospital to serve medical needs.