The owners of a new joint venture between a for-profit group and a local non-profit hospital expect the former Pascack Valley Hospital to rake in profits of 14 percent--six times the state average--thanks to market dominance, a renowned brand name and only private patient rooms, reported NorthJersey.com.
Hackensack University Medical Center and LHP Hospital Group have named their new for-profit hospital HackensackUMC at Pascack Valley and expect it to open in early 2013, NJ Today recently reported.
The owners plan to hire all new staff without union contracts or outstanding pension obligations, noted NorthJersey.com. They also could follow the lead of other for-profit hospitals, choosing to expand profitable services like cardiology, while curbing less profitable ones like obstetrics.
But with such high profit expectations, critics worry the for-profit objective of boosting value to attract investors may trump quality-of-care efforts, the article noted.
In fact, a study published in the Rand Journal of Economics found that between one and two years after converting to for-profit status, patient mortality rates increased and staffing dropped, all despite growing profits, Ocala reported.
To ensure the for-profit conversion doesn't reduce quality, non-profit hospitals should create a contract lease that guarantees certain services, Larry Scanlan, a hospital merger expert hired by Munroe Regional Medical Center trustees, told Ocala. The Munroe trustees are examining the pros and cons of leasing or selling the nonprofit Florida medical center. One hospital maintains that the switch in status helped its services. At Putnam Community Medical Center in Palatka, Fla., the for-profit conversion enabled it to add cardiovascular procedures, refurbish patient rooms, improve the emergency department and hire more staff.