Published by Susan K. Livio on NJ.com.
TRENTON — Cooper University Health announced Thursday it plans to acquire three Catholic hospitals in central and south Jersey, creating the fourth largest healthcare chain in a state in which mergers have become routine business.
Cooper Board Chairman George Norcross said the planned acquisition will create a $2 billion entity stretching from Mercer to Atlantic counties, employing 12,000, not including a network of 875 doctors.
The takeover of Trinity Health hospitals — Our Lady of Lourdes Medical Center in Camden, Lourdes Medical Center at Burlington in Willingboro and St. Francis Medical Center in Trenton — cements Cooper’s dominance in the south Jersey health care market, Norcross said. Together with Cooper’s 635-bed flagship hospital in Camden, the chain would operate 1,382 beds.
Cooper’s footprint has been growing in earnest in recent years, with the creation of Cooper Medical School of Rowan University in 2012, and the partnership with renowned cancer hospital MD Anderson in 2013.
“This agreement will bring together health care providers from across south and central New Jersey, allowing us to dramatically expand access to the high quality of care for thousands of new patients,” according to a statement from Norcross, who is also known as one of the most influential political power brokers in the state.
“Since its founding 130 years ago, Cooper has always been committed to providing the best care possible for its community,” Norcross’s statement state. “With this announcement, the size of our community may expand, but the high quality of care will remain the same.”
The merger builds on the hospital industry’s history of large consolidations amid uncertainty in Washington, D.C.
In New Jersey and across the country, the Affordable Care Act has driven mergers and acquisitions because the landmark health care law requires hospitals and doctors to focus on outpatient treatment and to curb long hospital stays.
Mergers also give cover to smaller hospitals, shoring up their negotiating power with insurance companies, and giving them access to money to make building and other capital improvements, New Jersey Hospital Association spokeswoman Kerry McKean Kelly said.
Ben Carter, executive vice president of Trinity Health said in a statement that the merger ensures “Lourdes and St. Francis will remain in good hands.”
“In today’s health care environment in New Jersey, continuing success for Lourdes and St. Francis depends on being part of a growing regional network with a strong presence in local communities,” Carter added.
In the last two years, Robert Wood Johnson University Health and Barnabas Health merged, creating the largest hospital and medical provider chain in New Jersey. Hackensack and Meridian also partnered up, creating the second largest hospital system.
“It is probably inevitable that Cooper would make some acquisitions, the trend toward consolidation is ongoing throughout the region,” said Katherine Hempstead, a senior advisor and health care expert at the Robert Wood Johnson Foundation. “It is in particular very difficult for small independent hospitals to stay afloat without becoming part of a system.”
The Virtua Health system, with three hospitals and many outpatient facilities, is Cooper biggest rival, although Kennedy University Hospital’s three facilities in Cherry Hill, Washington Township and Stratford and Deborah Heart and Lung Center in Browns Mills also share the market, Hempstead said.
Cooper’s “combined system will have a lot of market share in Camden and Burlington counties,” she added. “I wonder whether there will be some regulatory pushback.”
The merger must be approved by the Christie administration and may be reviewed by the U.S. Federal Trade Commission.
Linda Schwimmer, president and CEO of the Health Care Quality Institute of New Jersey, said she saw the merger as a great deal for Trenton residents who have little local access to obstetrical care.
“I think it presents a really good opportunity for the Trenton community. You have an inquiring entity that has a lot of experience serving the needs of a city with serious economic challenges,” said Schwimmer said, referring to Cooper’s involvement in Camden.
The deal, if consummated, will preserve the hospitals Trinity operates, Schwimmer added.
“It’s been a not-so-well-kept secret Trinity has been talking to various entities about selling or some other arrangement,” she said. “I think it’s good they are committed to putting resources” into the hospitals, especially Trenton.