Taken from NJSpotlight
July 7, 2020
In July 2017, leaders from Rutgers University and RWJBarnabas Health hosted a media event in New Brunswick to outline their plans for a potential 30-year partnership designed to beef up New Jersey’s medical education system, expand its biomedical research capacity and create a network of world-class health care practices.
The collaboration between New Jersey’s state university system and one of its largest private health care providers is well underway, although some of the paperwork spelling out details of the deal remains to be signed. That includes an important agreement related to RWJBarnabas’ role overseeing the clinical work and practice operations of more than 1,000 doctors, nurses and other health care providers affiliated with Rutgers. Originally targeted for completion July 1, it should be finalized in the coming weeks, the parties said.
While the coronavirus pandemic pushed back the schedule for completing this and other documents slightly, leaders at both organizations said it also strengthened both sides’ commitment to the initiative.
“The truth is I think we’ve never been more enthusiastic or grateful that we created this partnership,” said Barry Ostrowsky, president and CEO of RWJBarnabas, which operates 11 hospitals, a handful of urgent care centers and dozens of outpatient facilities, primarily in northern and central New Jersey.
“If COVID has proven one thing, it’s that the research aspect and the academic perspective on dealing with pandemics like this is critical and certainly supports our ability to provide the kind of clinical care we want,” he added.
Chancellor Brian Strom, who leads Rutgers Biomedical Health Sciences — an umbrella entity that includes the university’s two medical schools and nursing, dental and other health care colleges, plus several clinical institutes — said clinicians from both organizations worked together “seamlessly” to treat patients during the COVID-19 crisis. “The two teams worked together magnificently. It just really clicked. It showed the benefit of the partnership,” he said.
Similar partnerships have been undertaken elsewhere
The partnership — outlined in a 2017 letter of intent and a “master affiliation agreement” signed the following summer — seeks to create a stronger, integrated academic health system under a concept similar to those used by Yale New Haven Health System or Penn Medicine, where Strom served as a vice dean before joining Rutgers in 2013. It aims to improve the medical education curriculum and training options for students, retain more biomedical graduates in New Jersey and build a more robust workforce of clinicians, researchers and related professionals.
The deal calls for RWJBarnabas to invest $100 million upfront and up to $50 million a year to support Rutgers’ efforts to recruit additional researchers, enhance laboratory facilities, expand academic opportunities and encourage graduates to remain in the Garden State. The master affiliation agreement extends for 20 years with an automatic 10-year renewal, although the so-called mission-support payments will be re-negotiated after the first decade. There is a multiyear process to phase out the partnership when that time comes.
In addition, if RWJBarnabas does well financially — even in areas of business not related to the academic partnership — Rutgers also stands to benefit under the deal. The master agreement establishes a schedule of “variable mission payments” based on a graduated scale tied to the hospital system’s adjusted operating margin (essentially a measure of profit, before taxes and interest are paid) that could trigger payments to Rutgers of between 5% and 50% of that year’s margin.
“We felt the Rutgers University partnership is integral to our long-term success and, as such, we offered to Rutgers University the opportunity to share in that increased success,” Ostrowsky said.