Governor Chris Christie’s administration has put off for nearly three years deciding what it should do about the future of healthcare in Newark. But the scheduled sale of the bankrupt Saint Michael’s Medical Center, one of five Newark hospitals, should force a decision.
The outcome of the sale will likely help shape the quality of healthcare that Newark residents receive, according to industry attorneys and analysts. It could also affect the financial stability of all of the city’s hospitals.
State involvement in hospital bankruptcies normally is limited to issues related to operating licenses. But not in this case, for three reasons:
First, the New Jersey Health Care Facilities Financing Authority, which is chaired by Acting Commissioner of Health Cathleen Bennett, issued tax-exempt bonds for Saint Michael’s that currently total roughly $230 million.
Second, the state also owns another troubled Newark facility — University Hospital, which is facing millions of dollars in annual operating losses for the foreseeable future.
Third, if the state allows the sale of Saint Michael’s it should get a short-term financial shot in the arm. But if were to decide to take over the facility, it could realize a greater payback over a longer period.