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N.J. takes slow, steady approach to for-profit hospitals
December 27, 2011
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By Rowland, Dean
Proquest LLC
For-profit hospitals first appeared on the health care scene in New Jersey in 1998, when a private health services group in Colorado took over management of Bergen Pines County Hospital, in Paramus. But it took four years before another one appeared, when Memorial Hospital, in Salem, changed ownership.
But since then, it’s become more routine, if no less controversial. Four other nonprofit hospitals have turned for-profit since 2002, and two more are pending.
“It took a while for the New Jersey market to stabilize and find its legs,” said Kerry McKean Kelly, spokeswoman for the New Jersey Hospital Association. “Clearly, for many years, New Jersey wasn’t attractive.”
The “maturing” of the health care market in the state began in 1993, when hospitals were forced to negotiate their own reimbursement rates for medical services with private insurers, Kelly said. Financial uncertainty gripped the competitive market, and it took many years for the anxiety to calm. Though hospitals across the country were converting from nonprofit to for-profit ownership in small and slowly growing numbers, private equity and management companies were sitting on the sidelines when it came to setting up shop in New Jersey.
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