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More than 1,000 people were laid off, bruising the local economy. "We experienced the General Motors thing," said Tremble. "That's 1,000 of my customers, 1,000 mortgages that are in question."
The state's health commissioner authorized the closure, concluding that other hospitals in the area could handle the increased patient load and in fact would be strengthened. Indeed, The Valley Hospital in Ridgewood, at six miles west the closest acute care center, and Englewood Hospital and Medical Center, eight miles to the south, significantly improved their financial health.
But last summer, Hackensack University Medical Center, a 775-bed teaching and research hospital that is one of New Jersey's most prestigious, requested state permission to open a new hospital in Pascack Valley's empty buildings. Although Hackensack is a nonprofit, it announced that Westwood would be getting a for-profit facility financed by a private equity firm from Texas.
Hackensack is not looking to survive; it's aiming to grow. One of the busiest hospitals in the country, Hackensack took in over $1.1 billion in 2007, giving it an enviable seven percent operating margin, according to its tax records. In its application to state regulators, Hackensack said the new hospital would "relieve the bed pressure" at its main campus," where almost every bed is usually filled.
Hackensack executives said the recent closings of three hospitals in the region have eliminated the region's surplus of beds, and that the area's aging population will require more services in coming years. They said Hackensack can bring Westwood and surrounding areas better medical care than can anyone else.
"To me, this is a no brainer," said John Ferguson, who until last week was Hackensack's president and chief executive officer. "We're not asking for one penny. We're taking all the risk. It's just the other institutions are afraid of competition, but in my opinion competition will make them even better."
But at Valley and Englewood hospitals, executives interpret Hackensack's plan as a battle for dominance at the expense of their stability. Michael Pietrowicz, Englewood hospital's vice president for planning, said the hospital fills less than half the number of beds it is licensed to have and would lose $20 million if Westwood gets a new hospital. "If that place were to reopen, we would have to have layoffs, we would have to close services," Pietrowicz said. "To allow something like this, that flies in the face of rational health care, would be devastating to Englewood Hospital and the communities we serve."
Ridgefield's and Englewood's hospitals have launched petition drives and competing Web sites carrying emotionally laden messages, accusing each other of placing profits over patient care. Two members of the commission appointed by Gov. Jon Corzine, a Democrat, to evaluate the state's hospital bed glut have written Corzine in opposition to Hackensack's new venture.
"It makes no damn sense," commission member David Hunter, a consultant and former hospital executive, said in an interview. He said adding a hospital was an especially bad idea since Congress and Obama are focused on extracting large savings from the health care system. "When you're heading into this much uncertainty, it's not a time to be adding any capacity," Hunter said.
Bruce Vladeck, a panel member who had been a senior health care official in the Clinton administration, said in an interview, "If there was ever a facility that wasn't needed in terms of the supply of services relative to the population, this is as clear cut a case as you can get."
Westwood begs to differ. Many residents and local officials are infuriated by opposition from Ridgewood's and Englewood's hospitals, which can be up to a half hour away in heavy traffic. In early May, Mayor John Birkner Jr. organized a four-mile march with 50 supporters to Ridgewood that was stopped at the village border for want of a permit. Westwood residents are particularly livid that the two other hospitals offered $2 million in bankruptcy court to buy and retire Pascack Valley's old operating license, which Hackensack was awarded in May.
"This is about money and greediness, not about helping people," said Vivian Stubbs of Westwood. "If I didn't know what was going on, I'd think they were talking about cattle, not people."
Westwood's elderly say a resurrected hospital would make it easier to get to doctors' appointments, dialysis, radiation treatments and physical therapy. "I'm supposed to go for lab work every three months," said Theresa Giannone, 76, a retired housekeeper. "I've been stretching it for five months."
On June 8, the state health department will hear public testimony before deciding whether to approve Hackensack's plans. That decision is sure to be closely watched by New Jersey's 59 hospital systems, about half of which lost money last year, as a sign of whether the state is willing to put its regulatory muscle behind the commission's findings.
Regardless of whether Westwood gets a new hospital, the financial pressures on the entire industry are expected to get worse as more medical procedures migrate outside hospital walls and public and private insurers clamp down on reimbursement. Those strains, experts say, will continue to drive hospitals to pursue more patients with high-end treatments and bigger buildings - keeping the country's health care costs on their upward trajectory. Even if Congress alters the financial incentives, hospitals may not change course overnight.
"Every hospital board thinks they can out-compete the neighboring hospital," said Joel Cantor, director of the Rutgers Center for State Health Policy in New Brunswick. "It'll take some time before hospital boards recognize that expansion is not the only imperative they have."
This information was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery. © Henry J. Kaiser Family Foundation. All rights reserved.
