Vineland System, Underwood-Memorial to Join Forces

South Jersey Health Systems, a growing network in Gloucester, Cumberland and Salem counties, announced Thursday plans to merge with Underwood-Memorial Health Systems in Woodbury.

The merger brings the total of acute care community hospitals under the South Jersey Health Systems banner to three, including the SJH Regional Medical Center, a 262-bed facility built in Vineland in 2004, and a 97-bed hospital built in Elmer in 1950.

Underwood-Memorial is a 305-bed, nonprofit hospital that was incorporated in 1966 following the merger of the independent facilities Underwood Hospital, founded in 1915, and Memorial Hospital, founded in 1919.

Underwood President and CEO Eileen K. Cardile will maintain her job and become executive vice president for South Jersey Health Systems. Underwood’s hospital board will remain intact with representatives joining South Jersey Health Systems’ board, said SJH spokesman Greg Potter.

“We are looking for more growth, so we have no plans to eliminate jobs at either place,” he added.

Through conversations, both organizations found they had similar missions and a merger would strengthen both in a way that benefits the region, Chet Kaletkowski, South Jersey Health System’s president and CEO, said.

“This isn’t being done just for egos. This is to improve patient care,” he said. “These are two organizations on the same trajectory that want to improve standard of care. We think that’s a plus.”
South Jersey Health Systems is also “examining the identity of both brands” to determine if Underwood’s name will be changed, said Potter.
South Jersey Health System employs about 3,500 full- and part-time workers. Underwood has about 1,700.

About 850 registered nurses at South Jersey Health Services are represented by the Health Professional and Allied Employees Union, Local 5131, which supports the merger.

“We look forward to working with our nursing colleagues from Underwood,” said union representative Michele Silvio.
“We will monitor the regulatory process and advocate for community input, improved staffing and nursing involvement in quality initiatives. We also hope a new board would respect the rights of all of its nurses to organize and bargain for improvements in the workplace,” she said.

Michael McLaughlin, chairman of Underwood’s board of directors, said impetus for the merger comes down to dollars and cents.
“There is no doubt that health care reform is creating an environment in which partnerships and alliances can be even more beneficial to health systems and the communities they serve. With significant reductions in Medicaid and Medicare reimbursements expected, this merger will better position our organization to meet these fiscal challenges and to grow,” he said.

South Jersey Health Systems is growing and modernizing older facilities to make them more efficient, noted Kerry McKean Kelly, spokeswoman for the New Jersey Hospital Association.

“Some valuable things can come from the merger of two community hospitals. Larger health systems offer a broader array of services and have more access to capital, while residents of Woodbury and surrounding towns will continue to have access to acute cure.”
A combined 700-bed hospital system would give it strength in the marketplace that wasn’t there before, making it easier to attract more physicians and go after better contracts, Kaletkowski said.
Underwood has experience and strength in cardiology services that South Jersey can benefit from, he said. Underwood does emergency percutaneous coronary intervention, which South Jersey has been approved for, but has not implemented, Kaletkowski said.

Each hospital will maintain its board of trustees but a system board will be created to oversee the new system, Potter said. That board will, at least initially, have eight representatives from South Jersey and seven from Underwood.

South Jersey’s board chairman, Peter Galetto, will also serve as that board’s chairman and McLaughlin will be vice chairman, Potter said.
The last hospital to close in South Jersey was Kessler Hospital in Hammonton in 2009.