Catholic Health East: President's Letter

	Robert V. Stanek President and CEO

August, 2008

It all started with a telephone call.

In March 2007, CHE received word that the Archdiocese of Newark was looking for a potential suitor of Cathedral Healthcare System, the Diocesan-owned, three-hospital system located in Newark, New Jersey. The system was in critical financial condition with the possibility of catastrophic impact upon many poor and underserved residents of the city.

Admittedly, our initial assessment of the situation painted a bleak picture for the future. A hemorrhaging financial history. Outdated facilities in need of major capital improvements. Strong competition in an overbedded service area.

Little did we know at the time…but in this caldera of financial despair and hopelessness, the structure of a new virtual organization, CHE of New Jersey, was about to be forged.

The more we analyzed the situation, the more we realized that the Cathedral’s Saint Michael’s Medical Center, in some way, shape, or form, needed to be rescued. We could not stand by and allow an essential provider of Catholic health care in a poor, urban location to simply vanish, leaving thousands of the region’s most vulnerable residents without quality, accessible health care. Besides, CHE had some experience and expertise in successfully working in poor, urban areas to provide quality health care to needy residents; in fact, our two New Jersey RHCs, Lourdes Health System and St. Francis Medical Center, had long, proud histories of serving poor and underserved populations in Camden, Trenton and Willingboro.

CHE – led by Alexander Hatala, Judy Persichilli, and Sr. Kathleen Popko – commenced an intensive, year-long review of Cathedral’s financial and clinical operations, and engaged government officials and community leaders in the process. In the end, the case was made to assist Cathedral Healthcare System. Through the strengthening of its flagship, tertiary care facility (Saint Michael’s Medical Center) and the transitioning of its two neighboring community hospitals (Saint James Hospital and Columbus Hospital) into ambulatory care facilities, Catholic health care in the greater Newark area could be maintained…and enhanced.

The acquisition of what is now known as Saint Michael’s Medical Center is consistent with CHE’s mission, our 2017 Preferred Health Care Delivery Model, and our financial operating objectives. It is also key to our emerging regional strategy in New Jersey. This acquisition creates a “CHE of New Jersey”: the largest Catholic health care system in New Jersey, with over $800 million in revenues, over 53,000 inpatient admissions, and nearly 9,000 employees.

Our enhanced…and growing… continuing care services and expertise are key components of CHE’s strategic plan and our Vision for health care delivery in 2017…and one more way that we strive to be a transforming, healing presence in the communities we serve.

The scale and scope of CHE of New Jersey benefits Catholic Health East and the communities we serve in many ways, including:

Care of the Poor – CHE’s Mission compels us to “…continually seek ways to assure access to services to persons most in need.” The alignment of our hospitals in key urban New Jersey locations strengthens our ability to advocate for better funding for programs and services that meet the needs of our society’s most vulnerable residents – those who are poor.
Good Stewardship – Combining the hospitals from the Cathedral Healthcare System and CHE’s existing New Jersey facilities in a CHE of New Jersey structure provides efficiencies, eliminates redundancies, and reduces overhead for all facilities. This structure improves the viability of each individual facility site and creates a more sustainable model for urban healthcare in New Jersey.
Improved Financial Performance – Saint Michael’s Medical Center and the other Newark facilities, as well as the existing CHE Hospitals financial performance, will improve through utilizing the centralized services of CHE and the existing administrative and functional services at Lourdes Health System and St. Francis-Trenton.
Improved managed care negotiations and supplier negotiations – will provide additional value, through the negotiations of our statewide system.
Quality Service – Quality Outcomes to the Community Served – Leveraging the clinical strengths at all facility locations provides an opportunity to develop consistent, high-quality clinical outcomes to the communities served and to improve the reputation and standing of all the CHE facilities in New Jersey.

In summary, the opportunity that originally presented itself from that March 2007 telephone call – the plea to save an essential urban health care provider, and the critically important services it provided to the poor and underserved – will prove to be a blessing for us all. In addition to strengthening our New Jersey operations, our decision to welcome Saint Michael’s Medical Center as CHE’s newest Regional Health Corporation is evidence of our commitment to our Core Values of Community, Reverence for Each Person, Commitment to Those Who Are Poor, Stewardship, Courage, Integrity, and Justice.

CHE has answered the call in New Jersey. And we will continue to consider and pursue other opportunities throughout the eastern United States to further our Mission of being a transforming, healing presence in the communities we serve.

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