A state Superior Court judge today signed off on the sale of Saint Michael's Medical Center in Newark to Prime Healthcare Services, ensuring residents of state's largest city continue to have choice in healthcare.
Essex County Superior Court Judge Walter Koprowski signed an order for final judgment that grants approval of the sale of the 357-bed hospital to Prime Healthcare, a national hospital system with 42 acute-care hospitals in 14 states.
"We are thankful to Judge Koprowski for his ruling, and everyone involved in getting us to this point," said Luis Leon, President of Hospital Operations for Prime Healthcare.
"Our perseverance throughout the state's review of this transaction over the past three years, as well as our successful acquisition and turnaround of Saint Clare's Health System in Morris County and St. Mary's General Hospital in Passaic, are proof of Prime Healthcare's commitment to providing efficient, compassionate and cost-effective care to the people of New Jersey," Leon said. "We look forward to expanding that commitment to patients in the Newark area and to preserving Saint Michael's legacy of quality, compassionate healthcare to future generations of Newarkers."
The judge's order is the final hurdle in a process that began more than three years ago, when Prime Healthcare first entered into an agreement to purchase the assets of the financially struggling hospital.
The sale needed the approval of both the state Department of Health and the Attorney General's Office, which must ensure the sale is in the public interest under the Community Health Care Assets Protection Act.
The process was complicated by a report issued last year that recommended Saint Michael's be closed as an acute care hospital and converted into an ambulatory center. Faced with uncertainty, the hospital in August 2015 filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
As part of the bankruptcy proceedings, the hospital was put out to bid. Prime Healthcare upped its initial offer of $50 million to $62 million, outbidding another hospital company. As part of its offer, Prime Healthcare also agreed to increase its investment from $25 to $50 million to upgrade technology and services and continue to modernize the hospital.
Prime Healthcare has agreed to keep the hospital open as a full service acute care hospital and outpatient facility providing all of its existing services for a minimum of five years, hire substantially all 1,400 hospital employees, maintain or increase current levels of charity care, and maintain existing health insurance contracts.
"Our employees, medical staff, patients and the community have been waiting for this day for a long time," said David Ricci, president and CEO of Saint Michael's Medical Center.
"The judge's order brings closure to a long period of uncertainty," Ricci said. "I am thankful to all those who stood with us and by us during that period. Now we can look forward to a stable future under the leadership of Prime Healthcare that will allow Saint Michael's to continue providing high quality health care to the residents of Greater Newark."
Ricci, in particular, thanked a coalition that had formed to save the hospital. Lead by group of ministers, the coalition gathered more than 50,000 signatures urging the Christie administration to approve the sale to Prime Healthcare.
"We in the faith-based community are thrilled that the sale of the hospital has been finally approved," said the Rev. Ronald Slaughter, a co-chair of the coalition. "We appreciate Prime's commitment to serving those who are less fortunate in the community."
Newark Central Ward Councilwoman Gayle Chaneyfield Jenkins, who lead the effort on the City Council to save Saint Michael's, said the judge's order is a tremendous victory for City of Newark and its residents.
"The approval of this sale means 1,400 good jobs in Newark will be saved," Chaneyfield Jenkins said. "It also means $50 million in private capital will be invested in the Central Ward to modernize the hospital and the city will begin collecting property taxes from Saint Michael's."
Saint Michael's is currently exempt from paying property taxes. Under Prime Healthcare, the hospital would begin paying property taxes.
Chaneyfield Jenkins said if Saint Michael's closed, residents of the city would have been left with only one choice in healthcare providers.
"Prime's purchase of Saint Michael's ensures residents of the city continue to have healthcare choice," Chaneyfield Jenkins said.
About Saint Michael's Medical Center
Established by the Franciscan Sisters of the Poor in 1867, Saint Michael's is a 357-bed regional tertiary-care, teaching, and research center in the heart of Newark's business and educational district. Saint Michael's Medical Center is a member of Trinity Health. Learn more at www.smmcnj.org.