The state can’t afford to shortchange University Hospital anymore—the community is paying close attention
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Newark, NJ— University Hospital is an essential resource for New Jersey residents. It's the only state-owned public hospital and one of only three Level One trauma centers. It's home to a comprehensive stroke center and a regional perinatal center and serves as a primary care facility for many Newark residents. During the pandemic, it was the Northern Regional COVID center; yet the hospital is outdated and underfunded.
To renovate and expand its medical facilities and health services, the hospital is seeking funds for a redevelopment project that will cost an estimated $1.2 to $1.4 billion. To meet these projected costs, Mary Maples, the chief legal officer at University Hospital and current interim Chief Executive Officer (CEO), believes the hospital will have to tap the private industry for funding and expertise to ensure long-term sustainability. Still, the idea of private partnerships doesn't sit well with many residents and advocates.
"We want the necessary funding for University Hospital to thrive and to grow," said Ingrid Hill, a resident of East Orange, Vice President of the New Jersey Association of Black Psychologists and a long-standing member of the People's Organization for Progress (POP). "We do want a new hospital because the old hospital is falling apart, and it's about time. [But] we want to make sure there's no privatization. We know that we'll need additional funding, but what are the parameters around that funding is critical."
The terms of a Public Private Partnership (PPP) are typically set in a contract that outlines each party’s responsibilities and allocates risk, such as funding and construction elements. While a PPP can be helpful for organizations without the resources to improve services, its purpose isn’t just to address budget constraints, but to deliver effective, cost-efficient projects that fulfill a group's or community's unmet needs.
A PPP Guidebook only recommends such a partnership if the private sector can deliver cost-efficient or timely services that will have better results than if an organization were to deliver the same goods and services on its own.
Maples said a private partner wouldn’t change the public status of the hospital since the CEO and UH Board of Directors are the fiduciaries. If it comes down to a private partner, she said they would need to be approved by the Board of Directors and UH Community Oversight Board—and that’s before the state’s approval.
While the board of directors manages and supervises the operations of University Hospital, the role of the community oversight board is to ensure that the mission of the hospital and the intent of the Newark Accords are upheld. The accords require the hospital to provide access to essential health care services for the Newark community and enhance the hospital’s relationship with the community.
Before stepping down as CEO of University Hospital in early May, Dr. Shareef Elnahal said the hospital is trying to draw a line of what’s acceptable to the community. If they get a private health system partner, “we can outline the contours in a public process, of exactly how that type of relationship should look," he said.
For example, there could be an arrangement where a significant portion of proceeds would go to a private partner. However, if the hospital grows in volume and offers more services for more patients, Elnahal said that arrangement shouldn’t affect University Hospital. However, whether the next CEO will draw an acceptable line or see a private partnership the same way remains an issue. The hospital is currently seeking CEO candidates to replace Elnahal.
Although a private partner might be necessary to help fund the redevelopment project and improve services, the state is currently sitting on approximately $4 billion in pandemic relief funds and $3.2 billion in unallocated American Rescue Plan funds. Advocates say that money could be invested in University Hospital.
“University Hospital at this point is starting to fall apart,” said LaVita Johnson, the co-chair of Newark’s NAACP Health Committee. “We've been trying to fight to get some extra millions of dollars of funding from the governor and the senators and assembly persons in congress.”
The hospital is asking for $600 million from the Federal American Rescue Plan to cover expenses, but that would only cover half the cost. "The state is still working and reviewing with us what actually is going to be built before they sign on a dotted line anywhere of what they'll be able to contribute towards it," Maples explained.
In March, President Joe Biden signed a $1.5 trillion spending package, allocating $12 million to New Jersey for hospitals and community health centers to upgrade and better respond to community health needs. Of the nine hospitals and health centers receiving grants in the state, University Hospital received the largest at nearly $4 million, which they plan to use to build a new trauma operating room, but advocates argue that the state has a history of shortchanging University Hospital.
In 2021, the state gave Hackensack University Medical Center $100 million in federal relief funds. It's the largest hospital in the state and "part of the wealthiest healthcare system in the state," said Debbie White, the president of the Health Professionals and Allied Employees (HPAE) union, in a statement to the Senate Budget and Appropriations committee in April. "That money should have gone to University Hospital."
University Hospital is one of the largest providers of Charity Care, or free and discounted medically necessary services in New Jersey. Medicaid and uninsured patients account for almost 57 percent of the hospital's gross revenue.
Nearly 30 percent of Newark individuals aged 18 to 64 lack health insurance, compared to 16 percent in New Jersey, and about 20 percent of New Jerseyans are on Medicaid. Essex County has the highest Medicaid enrollment in New Jersey, and the pandemic triggered a sharp increase in the uninsured rate in the state, from 8 percent to 13 percent.
However, Medicaid and Charity Care may not cover all of a patient’s health needs. A report published in the International Journal of Environmental Research and Public Health shows that a lack of coverage is partially responsible for the estimated 40 percent of Newark adults with hypertension, 16 percent with diabetes, and 8 percent with chronic obstructive pulmonary disease and coronary artery disease. Newark also has one of the highest asthma rates in New Jersey, so residents welcome a project to improve and expand healthcare services—honoring the Newark accords.
But Newark NACCP and members of the Newark Coalition of Concerned Citizens haven’t just asked elected officials to support the $600 million from the Federal American Rescue Plan, but to increase the annual budget line item for University Hospital. Even though the state has significantly increased spending on Charity Care statewide, White said University Hospital has suffered “five years of stagnation and budgetary starvation.”
A budget table shows little gain over the past five years and a significant decrease in state funding since 2013 when most schools and units of the University of Medicine and Dentistry of New Jersey (UMDNJ) transitioned into Rutgers and University Hospital, an academic medical center and principal teaching hospital of Rutgers.
White requested the legislature increase funding for University Hospital from $44.7 million to $151.1 million to address infrastructure problems, technology lags and a much-needed wage increase, but the budget hasn’t budged. Gov. Phil Murphy signed the state budget into law on June 30 and approved $44.7 million for University Hospital.
The hospital needs about $20 million in emergency repairs every year alone, which is likely to increase the longer the hospital is neglected, so Newark residents and workers at University Hospital want to see more money invested by the state.
“New Jersey legislators need to invest more money into University Hospital because we don’t just cover the Newark area, we cover all 21 counties in the state of New Jersey,” said Banita Herndon, a Registered Nurse at University Hospital for 20 years and President of HPAE Local 5089, which represents nurses at University Hospital. “I think I’ve seen somebody come from just about every county here.”
Newark residents, activists, and hospital workers want to see the state finally invest more and support the redevelopment project so the hospital can operate at its best. If the state doesn’t, Hill said the concern is where the rest of the money will come from while ensuring it remains a public hospital. “They’re looking at ways,” she said. “That’s why we have to make sure and monitor because it has to remain a public hospital.”
Hill believes one of the essential places community members can show up to monitor the hospital and voice their concerns is at Board of Director Meetings and Community Oversight Meetings. “Boards have a lot of power, and the more communities respond to boards and hold boards accountable, then I think the more you’re going to get what you want.”
Although some residents and activists argue that communication between the community and hospital should be more than a hearing or listening session—but a conversation or negotiation—others say the board of directors should have better representation and involvement from the community and hospital staff.
The Restructuring Act in 2012—establishing University Hospital, which had been a component of the University of Medicine and Dentistry of New Jersey (UMDNJ)—set the foundation for the oversight board to serve as an advisory board to the board of directors. The nine-member oversight board must have two union representatives and two residents of Newark appointed by the Governor and the President of the Senate.
For the board of directors, the Governor must appoint all seven public members. Although one member must be a resident of Newark, no statute allows union or community representation on the board, a central sticking point to many Newark residents who believe the board with the most saying power should represent the community and staff at the hospital.
“Having organized labor, including the nurses’ union, represented on the board of directors would be a strong indication of commitment to the health and welfare of the community,” said Dr. Matthew Barry Johnson, a Professor of Psychology at John Jay College of Criminal Justice and former Rutgers University faculty member.
Although the current statute for University Hospital doesn’t allow union representation on the board of directors, residents want reform similar to Murphy’s N.J. Transit reform legislation in 2018. The legislation permitted two non-voting labor representatives appointed by labor organizations and two regular riders of trains and buses approved by the Senate to sit on the N.J. Transit Board of Directors.
“The community advisory boards are not sufficiently empowered to protect community interests,” said Dr. Johnson, which is why union and community representation on the board of directors are so important.
When the hospital and board of directors were accused of widespread corruption and fraud in the early 2000s, the state Health Commissioner established a monitor, Judith Persichilli, to assess University Hospital. The 2018 monitor report found that the oversight board failed to hold leadership accountable for underperformance and publish a schedule of regular meetings—making them available to the public.
Hill said the lack of care and regard previous CEOs and boards had for the hospital helps explain the current state of the hospital and the community's concerns. "It'll take some time in terms of remedies because some of the previous administrations didn't pay a lot of attention to the needs of University Hospital, the state included," she said.
In 2013, the oversight board established an ad hoc committee called the Community Advisory Council to help gather community recommendations for health services, conduct community health needs assessments and facilitate the Newark Accords. The advisory council includes seven community representatives from the Greater Newark region, appointed by the oversight board. The oversight board determines all qualifications.
As the board of directors can solicit the oversight board’s input on significant issues or actions under consideration at University Hospital, the oversight board can do the same—designate tasks and solicit input—from the advisory council.
However, some members from previous administrations still sit on the board of directors, and the lack of union and community representation on that board remains an issue for residents and activists. “If you have a board that is concerned about the community, then should there be representation on that board,” said Hill.
Johnson said she knows the hospital could do better and can be better if they work alongside patients, residents and workers at the hospital to acknowledge and address what's wrong. "You can't fix everything from the outside," Johnson said.
The 2020 Essex County Needs Assessment identified three critical problems in the county's healthcare system—disjointed services, inequity in Black communities, and lack of accountability for the quality of services provided. In Newark, the community wants better health services, a better experience when they visit the hospital—whether they're insured or not—and for the hospital to take their comments seriously and be transparent about its shortcomings.
“It needs to be fixed, and you got a group of people that's right here that wants to help you with fixing it,” said Johnson. The issue, she said, is whether the board of directors and new CEO wants that in return, adding that the Newark Coalition of Concerned Citizens was explicitly formed to monitor University Hospital and represent the community, unions and activists.
The 2018 monitor report acknowledged that organizations with the highest percentage of employees who feel involved and engaged tend to excel in critical areas of the patient experience. However, the report found that the employee engagement score at University Hospital was at the 4th percentile—the lower quartile.
With the CEO chair up for grabs as the call to ensure the hospital redevelopment project meets the community’s needs and gets the funding it deserves, advocates for the future of University Hospital have a lot on their plate as the summer progresses.
“I think it’s important that we continue to monitor and engage and demand transparency,” said Hill. “Demand that the state of NJ provide the necessary funding so University Hospital can thrive.”
In Part III of this series following the changes underway at University Hospital, PSA will follow the search for a new CEO of University Hospital.
