It wasn’t long into last Thursday’s news conference to announce all the benefits of the merger between Hackensack University Medical Center and Meridian Health that the two CEOs got to the long-term questions that were on everyone’s mind:
- Is this the beginning of a merger mania of hospital systems in the state?
- If so, which are the next entities to combine? After all, no one really saw this one coming.
The answer, from Meridian’s John Lloyd, may have been as surprising as the merger that will create Hackensack Meridian Health:
“Both of our organizations for the past few years have been in many discussions with other health systems and hospitals, and we each continue to talk to other hospitals,” he said. “Whether that materializes into them joining the new combined entity, we can’t say. But we are always out there talking to potential partners.”
Hackensack’s Bob Garrett agreed.
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Sure, this merger will make Hackensack Meridian Health the biggest system in the state, but that doesn’t mean it can’t get bigger.
“The health care landscape continues to change and evolve, and there will be probably other opportunities for this new system to provide great services to a greater number of people,” Garrett said.
Industry experts and insiders were hesitant to offer up any other potential mergers, but they all agreed more are coming.
“In the big scheme of things, this is not so surprising,” said Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute. “(Hospital consolidation) is a trend both here in New Jersey and nationally, and it will continue to happen.”
The reasons are simple. At least that’s how Garrett and Lloyd explained it at the East Brunswick Hilton.
“(Hackensack Meridian Health) will be a game-changer for the state of New Jersey,” Garrett said. “You are putting two of the best health care systems in the state together, with three goals in mind.
“First, through clinical integration and exchanging of best practice, we’re going to be providing superior quality care. Second, the geographical linkages that this merger provides will mean greater access to quality health care for the residents of New Jersey. And third, we will look for ways that we can deliver health care more efficiently, and keep the population healthy and well and disease-free.”
Some observers have suggested that the increased heft of the merged system also will provide leverage to negotiate higher reimbursement rates from health insurers and other players.
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“(The merger) is not about getting critical mass to use for leverage purposes; it is about expanding into new geography to better serve those residents and to give them better access to (hospital) and nonhospital services,” he said.
Just over a year ago, Lloyd and Garrett came together as two of the founding CEOs of AllSpire Health Partners, an alliance of seven health systems in New Jersey and Pennsylvania that are sharing best clinical and business practices.
At the time AllSpire was launched, its leaders said outright mergers of the systems were not their goal.
But after working together, it made more sense.
“I do think AllSpire gave us an opportunity to work closer together in more recent times and I think it probably did help us realize that this particular transaction and this merger made tremendous sense for both our organizations,” Garrett said.
The biggest question last week was how the merger was going to work. After all, Lloyd and Garrett are both well-respected leaders.
As it turned out, the issue wasn’t hard to solve. The two will serve as co-presidents for 30 months, at which time Lloyd (now 68) will retire and Garrett (now 57) will assume complete control.
“There is going to be a lot of work here and Bob and I are committed to dividing up the work and working together and getting it done,” Lloyd said. “It is definitely going to take two and a half years to get to where we want to be.”
Just where that is in 30 months remains to be seen. But there’s nothing indicating these two systems — or the state’s other major players — are done looking for partners.
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