Barnabas, Robert Wood Johnson merger will create giant system in New Jersey

Two large healthcare systems in New Jersey have announced their final plans to merge, creating a mega-system that would be by far the Garden State's largest provider.

The merger of Barnabas Healthcare and the Robert Wood Johnson Healthcare system would include 14 hospitals under ownership--mostly in Northern New Jersey--along with a contract to manage University Hospital in Newark. It would have nearly 30,000 employees, 9,000 physicians and annual revenue of $4.5 billion, NJ.com has reported.

The size of the deal eclipses that of another planned merger of two other New Jersey-based healthcare systems, Hackensack University Health Network and Meridian Health system, according to NorthJersey.com.

The New Jersey Attorney General's office would have to approve the merger and the creation of the new system, called RWJ Barnabas Health. It is expected to announce its decision sometime next year, NJ.com reported.

There have been some concerns that the merger would drive up healthcare costs, although both Barnabas and Robert Wood Johnson officials said this is not the case.

"One of the opportunities we have is to work in new ways to keep people healthy, and help people manage their healthcare costs," Stephen K. Jones, president and CEO of Robert Wood Johnson, told NJ.com.

But other industry observers, such as Chicago-based consultant James Orlikoff, noted that many large mergers fail to control costs, and may even fail operationally. The same opinion is shared by Suzanne Delbanco, the leader for the non-profit group Catalyst for Payment Reform. She noted that some systems have raised their prices as much as 50 percent after a merger was completed.

David Knowlton, CEO of the New Jersey Health Care Quality Institute, a consumer advocacy organization, said time would tell if the merger brought down costs, but that he was optimistic, NJ.com reported.

To learn more:
- read the NJ.com article 
- check out the NorthJersey.com article

 

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