New Jersey's crowded hospital industry has embarked on a merger and acquisition frenzy for more than six years
TRENTON -- The merger of Hackensack University Health Network and Meridian Health was finalized Tuesday, uniting 11 hospitals in seven counties from the New York border to the Jersey shore, according to hospital officials.
Declaring Hackensack Meridian Health "clinically strong and fiscally healthy," the CEOs from both systems will preside over nine acute care hospitals, two children's hospitals and 120 other locations that provide ambulatory care, surgical care, urgent care and assisted living services.
The merger takes effect July 1, according to a statement from the new hospital system. The company will have 25,000 employees and nearly 6,000 physicians.
New Jersey's crowded hospital industry has embarked on a merger and acquisition frenzy for more than six years, driven in large part by the landmark health care law's emphasis on outpatient care and preventive medicine.
Hospitals also agreed to take sizable cuts in Medicare funding in order to fund the Affordable Care Act with the promise of treating more insured patients. But in order to make the finances work, large hospital systems have merged and most independent community hospitals have been snapped up by chains.
"There has never been a more exciting time in health care. By harnessing the collective knowledge and resources of both Hackensack University Health Network and Meridian Health, we are creating a world class health network," said Robert C. Garrett, who is co-CEO of the new system with Meridian's CEO John Lloyd.
Hackensack Meridian Health is now the second largest hospital system in the state, behind the marriage of Barnabas Health and Robert Wood Johnson Health System in March.
In January, Meridian Health acquired Raritan Bay Medical Center in Middlesex County, extending its footprint into Middlesex County for a combined market of 1.5 million people.
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Meridian's properties also include Jersey Shore University Medical Center, Neptune; Ocean Medical Center, Brick; Riverview Medical Center, Red Bank; Southern Ocean Medical Center, Manahawkin; Bayshore Community Hospital, Homdel; and Raritan Bay Medical Center in Old Bridge and Perth Amboy.
Hackensack's properties include the flagship hospital; HackensackUMC Moutainside in Montclair; HackensackUMC at Pascack Valley in Westwood, and Palisades Medical Center in North Bergen.
Representatives from both hospitals' boards of trustees will continue to serve in that role led by Hackensack's Joseph Simunovich and Meridian's Gordon N. Litwin.
The union required the approval of the state Health Department and Attorney General's Office, and was under review since the merger was announced in May 2015. Health Commissioner Cathleen Bennett lauded the merger in a joint statement with the hospitals.
"Across the country, health care organizations are partnering to increase access to care, reduce costs and improve clinical outcomes," Bennett said. "We welcome the new Hackensack Meridian Health merger, which will help ensure that New Jersey hospitals and health systems remain ahead of the curve in comprehensive health care delivery."
New Jersey's rapid pace of mergers and acquisitions mirrors the rest of the country, said Lisa Goldstein, an analyst for the bond rating agency Moody's Investors Service.
"We think it will continue. There is a lot of informal and formal chatter," Goldstein said.
That interest extends to hospitals in Philadelphia and New York, Goldstein said.
"There's a lot of out-migration across the bridges for health care and I think the desire by New York City and Philadelphia to keep that stream going," she added. Employers and insurance carriers have made that harder by placing out-of-state providers outside the network or in a separate tier to contain costs.
Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.