New realities

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The pandemic has forced many businesses in New Jersey to adjust and recalibrate. Perhaps no sector required more rethinking than health care – especially hospitals, which were nearly overrun early in the pandemic and are still coping with both COVID-19 and the evolving expectations of patients.

To find out how the state’s largest health system is getting on and how executives there are planning for the future, NJBIZ recently spoke with Hackensack Meridian Health CEO Robert Garrett. Much of the discussion focused on the omicron variant and the ongoing efforts to contain the latest wave.

“We’ve come off the peak,” he said. “Having said that, though, there’s a significant number of patients still in critical care settings, a significant number of patients on ventilators and, sadly, there are still patients dying in New Jersey’s hospitals. But the encouraging signs are that the trends have been going in the right direction over the last couple of weeks. The modeling that we’ve seen was fairly accurate, and they said that we would peak around the middle of January, around the 12th. We actually did peak and you will see a pretty precipitous drop in hospitalizations.”

But Garrett also spoke about his priorities beyond the pandemic and how Hackensack Meridian will navigate the changing business landscape. What follows is an abridged version of that discussion, with the questions and answers edited for length and clarity. The full interview is available at njbiz.com/njbizconversations.

NJBIZ: The pandemic obviously had effects beyond people getting sick with the virus. There have been a lot of mental and behavioral health issues, a lot of New Jerseyans are struggling. In fact, I spoke about this with Gary Small not long after he came on as physician in chief for behavioral health at your company. And he was impressed with your efforts. Your acquisition of the Carrier Clinic; you just recently announced an expansion of capacity in Perth Amboy. I’m curious about what else you think you need to do, what else do you think you can do in that area?

Robert Garrett: It’s a multi-prong approach. So, you’re absolutely right when you say that the pandemic just exacerbated what was a mental health crisis nationally and in New Jersey. I think the multi-pronged process, if you will, is one we have to continue to expand access to care. So the idea of actually establishing a Carrier Clinic East in Perth Amboy at the Raritan Bay facility will be very important

We have a lot of good demographic information, as well as patient information, and we think that’s a really important site, to provide that access to care. I’d like to see that continued.

Enhancement to access to behavioral health services — now much of behavioral health services are being provided on an outpatient basis, these days. And so we need to continue to invest in ambulatory behavioral health. Our model of behavioral health urgent care, I think, is an important one. We opened up the first of that kind in New Jersey. I think it’s something that we will expand over time.

We are in the process of opening a new addiction treatment center — which is a huge issue now for New Jerseyans – up in northern New Jersey. I think there will be others to follow.

There the other piece is really trying to coordinate behavioral health services within the health care system to make sure there’s a good continuum of care. So if somebody is better treated in urgent care versus the emergency department or if somebody doesn’t need hospitalization because they can get treatment on an outpatient basis, we need to make sure that the system is well coordinated.

So there’s access, then there’s the coordination. And there’s a lot of research going on in the space and behavioral health in terms of diagnosing mental illness and treating mental illness through new therapeutics. So again, we will be doubling down our research efforts in the behavioral health space as well.

The other component that does play a role here is the social determinants of health and some of the inequity that we’ve seen in health care outcomes. We’re doing a lot in that space where we’re screening a significant number of individuals that come in contact with Hackensack Meridian, and if they are at high risk for either physical or mental health issues related to one of those social determinants like housing or food insecurity or transportation. We then make referrals to help those people in their communities with agencies.

The last piece is that we’re all committed to doing this, but we need to eliminate the stigma that still exists around mental illness. I often talk about the fact that that same stigma existed around cancer, maybe a generation or two ago, and we were able to deflate that. People recognized it as a chronic disease, they recognized it as the illness that it is and people talk about it freely. We saw testimonials of famous people who had cancer and spoke about their experiences. Well, we need to do same thing with behavioral health because behavioral health, mental illness is a chronic disease, and we have to treat it that way.

So I think we really attack all of those different aspects – access, coordination, research, the social determinants, along with reducing or eliminating the stigma, I think that that’s going to be an effective approach, but we’ve got to stay focused on it.

Q: I was going to ask you what the priorities should be coming out of COVID and it sounds like really what it comes down to is outreach and communication. You’re trying to reach people — you can’t wait for people to come to you

A: Yes, one of the big lessons of COVID is that people want to receive more health care, either closer to home or in their homes. So whether it’s technology like telehealth and telemedicine — and by the way, behavioral health a good example. During the height of the pandemic close to 95% of all our outpatient behavioral health consultations were done through telehealth. So we were able to reach more people through that technology. I see us continuing to invest in taking health care to people rather than people having to come to a hospital if we can avoid it.

One of the great examples there, and it’s a big movement across the country now, is hospital at home and we’re going to be starting a pilot program, actually Feb.1 at JFK Medical Center in Edison, and it will be focused on certain diseases, certain diagnoses to start. But it really shows a promise that we can really provide hospital-level care at home. There will be nurses who visit, people will have nutrition counseling. So it would be all the same people that may visit you at your hospital bed in one of our hospitals treating you at home. And then, of course, through telehealth you’ll be able to speak to physicians and other providers.

Q: OK, I want to switch gears to a strictly business discussion. Mergers and acquisitions have obviously been a big part of what you do and your growth. Last year the FTC moved to block your deal for Englewood Health and I’m curious as to where you think M&A goes for you from here. Is it still part of your plans or do you need to back off at this point?

A: I think it’s still part of the plan. It’s not the only way to consolidate or to provide care to new communities. It is one way to do it.

We disagree very strongly with the FTC on this issue. We felt there is more than adequate competition in the area around Englewood in terms of the number of hospitals, which was incredible when I actually heard how many they were within a few miles of Englewood. So we disagree with that, but they made their judgment and we’ll wait for the Court of Appeals to render a decision on that.

But I think mergers and acquisitions certainly would be one way to go and obviously the Federal Trade Commission and the Department of Justice and other regulatory agencies are looking at these transactions very, very closely. And they’re looking at them even more closely going forward. So there’s other structures that potentially could work that you can grow, you can consolidate, you can provide new programs and services to communities. They might be joint ventures, they might be affiliation partnerships. I mean I look at the model that we created up at St. Joseph’s Healthcare in northern New Jersey, which has been very, very successful. We focused on doing home care together. We focused on doing rehabilitation together. And now we just recently, as you know, signed a partnership with St. Joe’s to provide cancer care to residents of northern New Jersey together.

We’re still independent, we have independent boards. We didn’t merge, but we’re working very collaboratively, very closely together. So there are other structures out there, but now I’d hate to see mergers and acquisitions just not be available, because sometimes it may be the only way that a hospital that otherwise might not survive financially can survive — if they did have the benefit of a larger health system where that system could provide capital for new programs, new services. There may be no other way. So it may not be the only tool in the in the toolkit, but it still I think will be an important one.

Q: Putting aside M&A, where do you see areas for growth? Are there geographic areas you’d like to get into? Are there different practice areas? Where are you looking now?

A: More and more health care is being delivered outside of the hospital setting so I see the largest area of growth for us in ambulatory care and in home care. That means urgent care centers, that means imaging centers, dialysis centers. They come in all sorts of sizes and shapes, if you will. Some are as small as a physician’s office with maybe a small imaging component to it. Others are as big as 100,000 square feet and they would include urgent care and all of the above that I just mentioned, all in one setting. So we see ourselves continuing to provide that that type of care to communities.

There’s no doubt, again, that after the COVID experience people want world-class health care closer and closer to home. Look at what’s happening in cancer over the last few years. It went from an inpatient-focused type of delivery system to mostly outpatient, whether it’s radiation therapy or chemotherapy or other types of infusion therapy that’s being done primarily on an outpatient basis. That’s why you’re seeing Hackensack Meridian and others establishing ambulatory centers in communities closer to people’s homes. That’s where we’re making significant investments this year.

We already have announced, I think, six major ambulatory care expansions in each of our north, central and southern regions of Hackensack Meridian and I think you’ll probably see us in some geographies that we haven’t been in before, maybe where we don’t have a hospital. And the reason for that is that if we look at a community, and we think it’s underserved for any reason – whether it’s for cancer services or for urgent care – we will take a look at it. And if it makes sense for us to be providing services to that community, we will grow there and make that investment.