"Long Troubled" CarePoint New Jersey Hospitals To Undergo Financial Restructuring
It looks like high interest rate market shocks and the commercial real estate dumpster fire have only just begun. The latest example of volatility comes from New Jersey hospital operator CarePoint Health.
The operator owns three hospitals, including the 261-bed Bayonne Medical Center, as well as Hoboken University Medical Center and Christ Hospital in Jersey City, according to Bloomberg/Yahoo Finance.
Michigan-based Insight has stepped in to try and help financially stabilize the network and then rebrand under the Insight name.
Dr. Achintya Moulick, CarePoint’s chief executive officer said last week: “Throughout these past challenging months, CarePoint Health has remained resolute and focused on its mission of providing excellent patient-centered care to the people of Hudson County, and our collaboration with the Insight team has been extraordinarily helpful.”
Moulick continued: “Ensuring that our system’s safety net hospitals receive the investment they need to operate sustainably both now and well into the future remains our top priority, and we are exploring various options to meet that goal.”
The report notes that hospitals continue to face high costs for staffing and supplies, impacting even renowned institutions. The financial strain is particularly acute for facilities like CarePoint, which serve a larger proportion of lower-income patients and consequently receive lower reimbursements from government programs compared to private insurers.
The challenges at CarePoint serve as a prime example, Yahoo writes. The New Jersey Department of Health has provided almost $8.4 million in support since mid-February to assist the hospital system with payroll needs and to appoint a chief restructuring officer to aid in its financial recovery.
Insight’s Chief Strategy Officer Atif Bawahab added: “We’ve been in this situation before and we do have a strong sense of optimism for these hospitals to continue to stay open. But at the same time, we do have to make changes, and those changes will take some time.”
Insight acquired Chicago's oldest hospital, Mercy Hospital and Medical Center, from bankruptcy in 2021, preventing its closure. This move by Insight, known for its focus on neurosurgery, orthopedics, and sports medicine, was followed by the purchase of a closed rural hospital in Iowa.
Concerned by CarePoint's financial situation, the New Jersey Department of Health appointed a monitor in January and recently required CarePoint's hospitals to develop emergency plans for potential closures or service halts. CarePoint reported a $68 million loss last year, and several vendors have sued for unpaid bills.
CarePoint has faced financial difficulties for some time. Attempts to sell its Jersey City and Hoboken hospitals to RWJ Barnabas Health fell through in 2019.