New Jersey's crowded hospital industry has been engaged in a merger and acquisition frenzy for more than six years
TRENTON -- The merger of Hackensack University Health Network and Meridian Health was finalized Tuesday, uniting 11 hospitals in seven counties from the New York border to the Jersey shore, according to hospital officials.
Declaring the new entity known as Hackensack Meridian Health "clinically strong and fiscally healthy," the CEOs from both systems will preside over nine acute care hospitals, two children's hospitals and 120 other locations that provide ambulatory care, surgical care, urgent care and assisted living services.
The merger takes effect July 1, according to a statement from the new hospital system. The company will have 28,000 employees and nearly 6,000 physicians, hospital officials said.
New Jersey's crowded hospital industry has been engaged on a merger and acquisition frenzy for more than six years, driven in large part by the landmark health care law's emphasis on outpatient care and preventive medicine.
Hospitals also agreed to take sizable cuts in Medicare funding in order to fund the Affordable Care Act with the promise of treating more insured patients. But in order to make the finances work, large hospital systems have merged and most independent community hospitals have been snapped up by chains.
"There has never been a more exciting time in health care. By harnessing the collective knowledge and resources of both Hackensack University Health Network and Meridian Health, we are creating a world class health network," said Robert C. Garrett, who is co-CEO of the new system with Meridian's CEO John Lloyd.
Hackensack Meridian Health is now the second largest hospital system in the state, behind the marriage of Barnabas Health and Robert Wood Johnson Health System in March.
In January, Meridian Health acquired Raritan Bay Medical Center in Middlesex County, extending its footprint into Middlesex County for a combined market of 1.5 million people.
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Meridian's properties also include Jersey Shore University Medical Center, Neptune; Ocean Medical Center, Brick; Riverview Medical Center, Red Bank; Southern Ocean Medical Center, Manahawkin; Bayshore Community Hospital in Holmdel.
Hackensack's properties include the flagship hospital; HackensackUMC Moutainside in Montclair; HackensackUMC at Pascack Valley in Westwood, and Palisades Medical Center in North Bergen.
Before the merger, Hackensack and Seton Hall University announced the launch of a medical school, with an inaugural class planned for the fall of 2018, Garrett said.
Representatives from both hospitals' boards of trustees will continue to serve in those roles overseeing a joint board led by Hackensack's Joseph Simunovich and Meridian's Gordon N. Litwin.
The merger required the approval of the state Health Department and Attorney General's Office, and both signed off within the last two weeks, hospital officials said. A judge approved the merger Monday.
Health Commissioner Cathleen Bennett lauded the merger in a joint statement with the hospitals.
"Across the country, health care organizations are partnering to increase access to care, reduce costs and improve clinical outcomes," Bennett said. "We welcome the new Hackensack Meridian Health merger, which will help ensure that New Jersey hospitals and health systems remain ahead of the curve in comprehensive health care delivery."
Patients will benefit from the merger by gaining access to a much larger cadre of inpatient, outpatient and long-term care services, Lloyd said. The plan is to put a nurse in charge of each patient's case, providing the most comprehensive and integrated health system in the stat," he added.
New Jersey's rapid pace of mergers and acquisitions mirrors the rest of the country, said Lisa Goldstein, an analyst for the bond rating agency Moody's Investors Service.
"We think it will continue. There is a lot of informal and formal chatter," Goldstein said.
That interest extends to hospitals in Philadelphia and New York, Goldstein said.
"There's a lot of out-migration across the bridges for health care and I think the desire by New York City and Philadelphia is to keep that stream going," she added. Employers and insurance carriers have made that harder by placing out-of-state providers outside the network or in a separate tier to contain costs.
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.