CarePoint Health, which operates three hospitals in Hudson County, on Thursday released its first-ever economic impact study, which projects it will contribute $750 million a year to the New Jersey economy in the four years from 2014 to 2017, as millions of dollars in employee wages and capital investment flow through the state.Dennis Kelly, chief executive of CarePoint, said the study conducted by the Bloustein School of Planning and Public Policy at Rutgers provides a measure of CarePoint’s success in turning around the financial performance of its three hospitals while delivering essential medical services to Hudson County and northern New Jersey.
Kelly said all three hospitals were in bankruptcy when they were acquired by the for-profit CarePoint: Bayonne Medical Center in 2008; Hoboken University Medical Center in 2011; and Christ Hospital in Jersey City in 2012.
What he hopes the public will take away from the report, Kelly said, “More than anything, is just to understand that we started from nothing with the first acquisition — Bayonne — and, from that, we have grown into a very strong economic engine in Hudson County and North Jersey. Not only are we providing critical services on the heath care side of things, but we are also a very powerful and important economic engine for the region.”
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Kelly also said he hopes the Legislature in Trenton will consider CarePoint’s economic impact as it looks at regulating the “out-of-network” medical care provided by health care providers that don’t belong to insurance company networks. CarePoint’s Christ Hospital is poised to exit the network of the state’s largest health insurer, Horizon Blue Cross Blue Shield of New Jersey, unless the two sides reach a deal by the end of their current contract on May 31; the two other CarePoint hospitals will remain in the Horizon network. Kelly said the inability years ago to negotiate favorable reimbursement terms with health insurers contributed to the financial problems of the three hospitals.
Asked what he sees happening with out-of-network legislation, Kelly said: “I don’t know what to expect. We are concerned and we are actively involved in the discussions.”
The Rutgers report, prepared by Joseph J. Seneca, Michael L. Lahr and Will Irving, looks at both direct spending by CarePoint — for example, on salaries, equipment and capital investment — and the indirect impact, or the multiplier effect, as CarePoint spending flows through the economy. Besides salaries and purchases from vendors, the report estimated that CarePoint will invest $112 million in capital improvement through 2107.
CarePoint directly employs 3,700 people, but due to the economic multiplier effect, it will have a larger impact on employment in the state, according to the report.
The report estimates that in each of the four years from 2014 to 2017, CarePoint’s economic impact will be 7,527 jobs; $750 million in gross domestic product; $600 million in compensation; $23 million in revenue to the state government; and $7.7 million in revenue to local governments outside Hudson County.
CarePoint’s economic impact will be concentrated in Hudson County, according to the report, and in each of the four years will total 5,465 jobs; $559 million in gross domestic product; $454 million in compensation; and $23 million in revenue to country and municipal governments and school districts n Hudson County.
Seneca said the study attests to CarePoint’s significant economic impact.
“CarePoint has retrieved what were troubled institutions that were near closing, as I understand it, and therefore this really represents a net plus for the state economy,” Seneca said. “It has certainly been a boost to the economy of the state at a period of time when private sector job growth in the recovery period has been tepid for the state.”
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