The largest hospital chain is called RWJBarnabas Health
TRENTON -- The long-awaited merger of Barnabas Health and Robert Wood Johnson Health Services was completed on Thursday, creating the largest health system in New Jersey.
Some facts about the deal:
1. You won't notice any changes right away
There is a new logo and new leadership, but it will take some time before patients see changes.
"It will be business as usual tomorrow and for a short period of time," RWJBarnabas Health CEO Barry Ostrowsky said Thursday.
Behind the scenes the team "will be creating strategies around clinical programs and community initiatives, and our employees will be able to collaborate with our new family members and our physicians with their new colleagues."
N.J. hospital mega-merger a done deal
2. No employee layoffs are planned, and more jobs may be added.
The combined workforce includes 32,000 employees, 9,000 physicians and 1,000 interns and residents. RWJBarnabas Health is the second largest employer in New Jersey, behind Wakefern, the parent company of Shop-Rite. More jobs are likely to be created as medical services are expanded, Ostrowsky said.
"This is a merger of two very strong organizations, clinically and financially," Ostrowsky said. "There is no desperation here -- one is not saving the other."
3. Medical services will expand and research opportunities will grow
Barnabas Health brings a strong array of mental health programs and services that will be replicated and shared throughout the network, said Stephen Jones, former CEO of Robert Wood Johnson Health System who in the new order is the chief academic officer.
"They will get more grants for research and there will be more opportunities for medical students," said national health care consultant Ann Kohler. They should be able to deliver "a higher quality of health care."
4. Will it stabilize the cost of health care? Mergers have had a mixed record
Ostrowsky and Jones say they were not motivated to merge the two not-for-profits by the prospect of being able to drive a harder bargain with insurance carriers.
"Both of our organizations separately exert considerable leverage in the negotiating process," Ostrowsky said. "We find efficiencies that will reduce costs."
A 2012 Robert Wood Johnson Foundation article focusing on the impact of hospital mergers said price increases have been "dramatic, often exceeding 20 percent. ... when hospitals merge in already concentrated markets. Ultimately, increases in health care costs (which are generally paid directly by insurers or self-insured employers) are passed on to health care consumers in the form of higher premiums, lower benefits and lower wages."
5. Competition with other hospitals will intensify
New Jersey has been in the midst of a mergers and acquisitions frenzy since 2010, as the Affordable Care Act fundamentally changed the mission of health care to focus on preventing admissions and illness rather than treating conditions as they arise.
Hackensack University Health Network and Meridian are awaiting state approval of a merger that will create a chain of 11 hospitals from the New York border in Bergen County to the Jersey Shore.
As the lone community hospitals continue to be absorbed by larger chain, there will be greater competition for physicians, grant funds, and patients, health industry insiders say. The merger may hasten takeovers of smaller hospitals.
The Wall Street ratings firm Standard & Poor's has blessed this marriage. "We believe this merger makes sense geographically and recognize that each organization has different financial and operating strengths it can offer to the combined company," according to a January 2016 report.
Barnabas' holdings include Clara Maass Medical Center in Belleville, Community Medical Center in Toms River, Jersey City Medical Center, Monmouth Medical Centers in Long Branch and Lakewood, Newark Beth Israel Medical Center in Newark, Saint Barnabas Medical Center in Livingston and two children's hospitals. Barnabas also has a consulting agreement with University Hospital in Newark.
Robert Wood Johnson operates hospitals in Somerville, Hamilton, Rahway and New Brunswick and two children's hospitals. Robert Wood Johnson in New Brunswick is also affiliated with the Robert Wood Johnson Medical School and The Cancer Institute of New Jersey at Rutgers University.
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.