** FOR IMMEDIATE RELEASE **

04/27/2007

LibertyHealth Services Announces Operational Improvements and Repositioning at Jersey City Medical Center

Jersey City Medical Center (JCMC) today announced improvements in operations and repositioning of medical services to focus on health care programs needed by the community while moving away from programs other regional hospitals can and do provide.

The changes come after an eight-month review of hospital operations and reassessment of community needs as directed by the New Jersey Department of Health and Senior Services, in collaboration with Wellspring Partners, the hospital’s performance improvement consultant. The review and reassessment will continue throughout the year.

The completed plan is expected to save $32 million for JCMC, the region's teaching and community hospital, while expanding necessary programs and preserving services unique to the hospital so it can continue to operate as a true safety net and critical care hospital for the community. Even with the changes announced today, the hospital will rely on the State of New Jersey to provide $34 million annually in extra reimbursements for care JCMC provides to poor and uninsured patients.

About 65 percent of JCMC's patients are poor and are either covered by Medicaid or are uninsured. This is one of the highest percentages of poor or uninsured patients in the state and the source of the hospital's fiscal problems. Medicaid reimburses the hospital about 70 percent of costs, while Charity Care, the program for the uninsured working poor, reimburses about 65 percent of costs.

"Our choices are based on community need, unnecessary duplication of services throughout the county and what services the people of Hudson County get from other hospitals. We will place increased emphasis on mothers and babies because that is where the people of Hudson County have the greatest need," said Brett Harwood, chairman of the board of LibertyHealth System, JCMC's parent company. "Other hospitals have inpatient programs for children. In addition, today most pediatric services are outpatient. We do not want to continue to incur extra costs by duplicating what others are already doing. By refocusing our areas of care, we can serve our community better and improve the delivery of care."

Hudson County has an identified county-wide risk for low-birth weight babies. Consequently, the hospital has decided to enhance its obstetric services and maintain its position as the regional perinatal center for high-risk births.

In contrast, on an average day, as few as a third of the hospital's inpatient pediatric beds are filled. Since other Hudson County hospitals provide inpatient pediatric services, JCMC would not serve the community by continuing to provide these services. It would be a duplicate cost to the community. Parents will still bring their children to the emergency room for care, just as they do now.

"At a time when all hospitals are facing financial challenges, JCMC is taking steps to position itself for the future by making prudent changes in services so we can serve our patients better," Harwood said. "We have worked with Wellspring Partners to make changes that preserve our role as a safety net hospital while expanding some services to serve the growing needs of the region."

Since the hospital began its restructuring plan last year, it has implemented $22.4 million in operational improvements. These include:

• Revenue cycle improvements - Improved business office processes and improved managed care contracts.
  
• Non-labor changes - Renegotiating process, changing products and vendors, and redesigning clinical practices.
  
• Labor Productivity - Select hiring freezes and processes to better measure productivity.
  
• Clinical repositioning - Improvements to emergency medical services to reduce overtime and elimination of the pediatric residency program. As previously announced, the low volumes of pediatric inpatients at the hospital meant the teaching program for residents was at risk of losing accreditation

JCMC will reposition some medical resources in response to community needs, including expansion of existing services that patients use the most, transitioning away from underutilized services, maintaining services that are unique to the hospital and consolidating duplicative services. Examples:

• Improve high-risk obstetrics and newborn pediatric care. Hudson County has a 41 percent higher death rate for newborns than the state average and high risk factors for low-birth weight babies. Of all deliveries by adolescent mothers in Hudson County, 54 percent are in Jersey City. To meet this demand, JCMC will enhance its obstetrics and perinatology services. We will continue to serve as a regional perinatal center, invest in the neonatal intensive care unit (NICU) to increase neonatology coverage and post-NICU special needs services, as well as improve the residency program in obstetrics.
  
• Transition inpatient pediatric beds to general medical-surgical beds. Inpatient pediatrics volume has dropped by more than 36 percent at JCMC since 2005. Most inpatient beds remain empty, while a surplus of general pediatric beds exists in Hudson County hospitals. At the same time, JCMC needs more adult medical-surgical beds to handle adult patient volume, so the pediatric beds will be converted to help meet this need.
  
• Maintain Hudson County’s only access for certain medical services. JCMC is the only hospital in Hudson County to offer specialized services like open-heart surgery, psychiatric screening, outpatient dialysis, and advanced life support. All these services will be maintained, as long as state reimbursement for care given to the poor and uninsured stays at last year’s level.
  
• Maintain necessary trauma designations. JCMC will keep its Level II Trauma designation to allow the hospital to treat serious injuries. The emergency department will continue to care for injured and sick children.
  
• Consolidating services. JCMC and nearby Greenville Hospital, both part of LibertyHealth Systems, will consolidate services to efficiently maintain acute care expertise. Acute care services will be consolidated at Jersey City Medical Center.

JCMC and its parent company, LibertyHealth Systems, also continue to pursue additional improvements such as system changes, managed care contracts, revenue cycle improvements and non-labor improvements.

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Contact: John McKeegan, The Marcus Group, Inc. 973-890-9590