N.J. bill would let nonprofit buy Salem County hospital

Memorial Hospital of Salem County made New Jersey history when a major for-profit health-care system bought the struggling facility.

The law was changed to clear the way for the 2002 purchase of the nonprofit hospital for $34 million by Community Health Systems. Lawmakers were optimistic Memorial would expand into a thriving health network in the region.

But now, a dozen years later, the excitement has apparently waned and lawmakers are painting a dismal outlook for the hospital.

"The hospital is going to close," Senate President Stephen Sweeney (D., Gloucester) said recently. "There's not an announcement yet. I just know, and everyone down in Salem County knows, it's about to close."

Sweeney has been pushing a bill close to becoming law that would clear the way for a nonprofit to buy Memorial. A new owner could also seek to claim a pot of nearly $60 million currently controlled by an independent foundation that was created under the 2002 legislation.

But Memorial Hospital and its industry-giant parent company, Community Health Systems, have given no public indication there are any imminent plans to sell the hospital.

In a commentary published in the South Jersey Times on Sunday, hospital CEO Ryan Jensen tried to put the issue to rest. He said he had repeatedly been asked in recent weeks whether the hospital was closing.

"In case our track record, investment history, and strategic planning leave any doubt, the answer is simple: No," he wrote. "There are no plans to close the hospital. Our board and management team are fully engaged in strategies to support our long-term success."

A shutdown of the 140-bed facility would be a major blow to the largely rural area. With nearly 66,000 residents, the county ranks 20th out of the 21 New Jersey counties in health-behavior measures, including adult obesity, and it ranks last in overall mortality from premature death.

In the spring, the hospital closed its maternity ward. Last year, it provided more than $10 million in charity care.

The hospital has more than 500 employees and is the second-largest employer in Salem County. Jensen said it pumped $26 million into the local economy and paid $1.6 million in school taxes.

The pending legislation doesn't name Memorial Hospital, but Sweeney and a cosponsor, Assemblyman John Burzichelli (D., Gloucester), said the bill was drafted for the hospital.

The lawmakers have said the Cooper Health System, a nonprofit headed by Democratic power broker George Norcross, may be interested in buying the hospital. However, a Cooper spokeswoman said in an e-mail, "We are not in negotiations to purchase."

A spokesman for the Inspira Health Network, which has hospitals in Cumberland, Gloucester, and Salem Counties, also said it was not involved in discussions to buy Memorial.

The Assembly will vote Thursday on an amended version of the bill, which has already been approved by the Senate. If approved, it would then go to Gov. Christie.

"Our intention here is to make sure that we have a mechanism in place that gives that hospital the very best possibility of survival if a transaction is going to occur," Burzichelli said.

If approved, the bill would allow a new nonprofit to use money set aside for the Salem Wellness Foundation to provide health services. The money came from proceeds when the hospital was sold to Community Health.

The foundation has the first option to buy the hospital if it is put up for sale. If it chooses not to, a new nonprofit can use the foundation money to buy the hospital under the proposed bill.

"We're not quite sure why the legislation is needed," said Brenda Goins, the foundation's executive director. "We are open to talk with any organization."

The state attorney general and a judge would have to decide whether to approve the deal.

The county, which borders Gloucester and Cumberland Counties, has another health-care facility, Elmer Hospital, but it is about 25 miles away.

Community Health Systems, owner of Memorial Hospital, owns, leases, or operates more than 200 hospitals in 29 states, including Chestnut Hill Hospital, Brandywine Hospital, Phoenixville Hospital, and Easton Hospital.