Newark's University Hospital looks for manager, prepares to split from UMDNJ - Health Professionals & Allied Employees

Newark’s University Hospital looks for manager, prepares to split from UMDNJ

NEWARK — After months of speculation about its future, University Hospital in Newark is officially looking for a partner to help run one of the state’s largest and most complex health care facilities.

The state-owned hospital issued a request for proposals late Friday soliciting bids from nonprofit companies to take over day-to-day management. The move comes as University Hospital is preparing to split from the University of Medicine and Dentistry of New Jersey in July.

The partnership between the state-funded hospital and an outside firm would be the first of its kind in New Jersey. It will be closely watched by patient advocates and low-income residents who rely on the money-losing hospital for charity care in large numbers.

Denise Rodgers, UMDNJ’s interim president, sent a letter to the university community reassuring the staff that the 519-bed hospital’s mission will not change with an outside company running operations.

"After July 1, UH will continue as the principal teaching hospital for New Jersey Medical School, New Jersey Dental School and other UMDNJ health professions schools in Newark," Rodgers said.


University Hospital, which is North Jersey’s only Level-1 trauma center, has been run by UMDNJ for years. But the hospital was left without a partner in the massive higher education reorganization legislation signed by Gov. Chris Christie last year because no university wanted to assume responsibility for the financially troubled hospital or its $116.9 million debt.

Under the plan, UMDNJ will be broken up and Rutgers University and Rowan University will take over its schools. University Hospital will be spun off as its own state-funded entity.

In November, the hospital hired Deloitte Financial Advisory Services for $1.2 million to help sort out its future.

Deloitte helped craft the 50-page request for bids for a manager.

The proposal says all bidders must be nonprofit companies operating at least one hospital in New Jersey. It does not give any hint of what the management company would be paid, except to say the bids must be "fair and reasonable."

The hospital’s nearly 3,000-member staff will remain state employees and keep their benefits, the document said.

University Hospital had discussed a partnership with Barnabas Health Care System, the state’s largest nonprofit hospital chain and owner of several neighboring hospitals. But nothing ever came of those discussions.

A Barnabas spokeswoman declined to comment on whether the company planned to bid on the University Hospital contract. Atlantic Health System, one of the state’s other large private chains, is not interested in bidding, a spokeswoman said.

Patient advocates and union officials are among those combing through University Hospital’s guidelines in its request for bids for a new partner.

It appears working conditions and employee rights will be protected, said Jeanne Otersen, a policy director with the Health Professionals and Allied Employees, one of University Hospital’s unions.


But Otersen said she was concerned that the new University Hospital Community Oversight Board, which is designed to ensure the hospital continues to serve Newark and its surrounding area, will have a limited role in choosing the new manager.

Under the plan, the board will only have a chance to comment after a deal is signed.

Patient advocates said they will reserve judgment until they see which company wins the bid to run the hospital.

The deal would be a good one for University Hospital and Newark provided the manager is responsible, financially stable and transparent, said Renée Steinhagen, executive director of New Jersey Appleseed Public Interest Law Center, a nonprofit group that advocates for health care reform.

"It depends on the specific entity and the track record of that entity," she said.



By Kelly Heyboer and Dan Goldberg/ The Star-Ledger