In a joint-press release, the two institutions said the non-binding LOI sets forth a basic structure for the proposed transaction and puts the institutions on a path toward reaching a Definitive Agreement, expected before the end of the year.
The LOI is the first step in the process of evaluating and designing a new relationship that will enhance health care services for residents in northern and central New Jersey.
Both parties said that they will now engage in a due diligence process to define the specifics of the relationship. Approvals will be necessary from State and Federal officials, the Catholic Church and others before the transaction is considered complete.
“I see our eventual move into the RWJBarnabas Health system as an extremely positive and exciting development for our institution – one that will give us the resources and opportunities to greatly enhance the already high level of care we provide to our community,” Trinitas President and Chief Executive Officer Gary Horan said in a statement.
RWJBarnabas Health has a service area of nine counties covering five million people. The system includes 11 acute care hospitals, three acute care children’s hospitals, and a pediatric rehabilitation hospital, among many other facilities. RWJBH has a partnership with Rutgers University, which created New Jersey’s largest academic health care system.
Trinitas Regional Medical Center is a 554-bed, Catholic, acute care teaching hospital located in Elizabeth. Trinitas provides care throughout the state to more than 400,000 patient contacts per year.
In 2000, Trinitas was created following the merger of Elizabeth General Medical Center and St. Elizabeth Hospital.
Under the terms of the LOI, the role of Trinitas as a full service provider of acute health care services for the eastern Union County community would be enhanced. RWJBH will make significant investments in Trinitas and will expand the network of outpatient services currently provided by Trinitas.
RWJBH said the terms of the proposed transaction would establish it as the sole corporate parent of Trinitas.
Trinitas will remain a Catholic institution and will abide by the Catholic Ethical and Religious Directives. The Sisters of Charity of Saint Elizabeth will continue to serve as the Catholic sponsor of Trinitas and the Elizabethtown Healthcare Foundation will continue to address the needs of nonprofit organizations in Union County, including RWJBH/Trinitas. The Trinitas board will continue to oversee day-to-day operations of Trinitas.
The LOI states, in part: “The parties have been in discussions for some time and share a common perspective and culture regarding providing high quality, cost-effective services to their communities consistent with their respective missions and the need to move in the direction of population health management.”
“The rapidly changing health care landscape presents new challenges and opportunities,” said Barry Ostrowsky, president and CEO of RWJBarnabas Health. “Trinitas is a vital resource to the eastern Union County community, and through this agreement we would greatly expand our reach into new communities with our mission of improving the health and well-being of its residents. We are excited about the many possibilities for collaboration signaled by this Letter of Intent.”