State to OK creation of city 'hospital authority'
Moving closer to Hoboken's takeover of St. Mary
Hoboken Reporter
07/02/2006

Within the next week, the New Jersey state legislature is expected to pass a law that will facilitate Hoboken's purchase of St. Mary Hospital. The bill permits cities to create their own "hospital authority," a quasi-governmental agency, much like a parking authority.

The legislation, which is sponsored state Sen. Bernard Kenny (D-33rd Dist.) and Assemblyman Albio Sires (D-33rd Dist.) has already passed the state Senate and will likely be approved by the Assembly sometime this week.

"The authority is charged to function as the hospital governing body responsible for establishing hospital-wide policy, establishing and enforcing rules, ...maintaining quality of care, and providing institutional management and planning.," reads the law. The Hospital Authority is also empowered under the act with customary authority powers, including the power to issue bonds.

In transition In June, Harvey A. Holzberg, the former president and chief executive officer of Robert Wood Johnson University Hospital, was hired as a "consulting director with full executive responsibilities" to run all operations at St. Mary Hospital.

St. Mary's current owner, Bon Secours Health System, Inc. (BSHI), a private Catholic health care company based in Marriotsville, Md., is currently negotiating to transfer ownership to the city of Hoboken, a move that is strongly supported by Mayor David Roberts, Kenny, and most of the hospital's current staff.

Currently, Hoboken's only hospital, the oldest in the state, is on the verge of closing because of financial losses. The hospital has over 1,000 employees and 328 beds.

Why is this necessary? The special legislation is needed to make the transaction legal. Every year, municipalities are only allowed to increase spending by a certain percent. By taking on the expense of running a hospital, the city would easily cross that threshold, according to a recent decision by state Department of Community Affairs Commissioner Susan Bass Levin.

To get around this, Kenny and Sires are sponsoring this legislation. The hospital authority's budget would be separate from the city's.

Pols talk about progress

Roberts said he believes that semi-autonomous hospital authority is the best mechanism to manage St. Mary Hospital.

"We are trying to develop a model that gives Holzberg the easiest and most efficient path to running at top flight medical center and not a department of government," Roberts said.

Roberts also thanked Kenny, Assemblywoman Joan Quigley, Sires, and "all of those who are working so hard to ensure that St. Mary Hospital remains open."

Roberts also reported that since Holzberg has come on board, the hospital posted a $175,000 profit last month.

Quigley added that the legislation is an important step towards Hoboken acquiring the hospital, but added that Roberts is the one who should receive the real credit for the process to this point.

"We're only carrying out the technical aspects; he is the one that had the vision," Quigley said.

Quigley added that she hopes that Gov. Jon Corzine will sign the bill by July 12 so that an ordinance to acquire the hospital can be in front of the Hoboken City Council as soon as possible.

Who will be running the authority? The hospital authority will be governed by an 11-member board, according to the state law. The members are to be divided among four groups.

The mayor will appoint one designee. Two members of the board must hospital employees, and will be appointed by the medical staff executive committee of the hospital.

The third group will be comprised of six members of the public, at least four of whom must be residents of the city. None of these board members can be employees of the city or of the hospital.

Of these six appointees, one must have extensive expertise in finance of private or nonprofit organizations, and one must have extensive expertise in nonprofit organizational management.

Rounding out the board will be the hospital's chief executive officer, as well as an appointee by the state Commissioner of Community Affairs, both of whom will be nonvoting members.