In an era when many New Jersey hospitals are booming and health care workers can command better wages and working conditions due to increased staffing demands, it’s unusual to see one faltering so much that it’s threatening to lay off a huge portion of its workforce.
But executives at one of New Jersey’s most troubled hospital systems have told state regulators they plan to lay off as many as 2,600 workers by the end of the year.
CarePoint Health filed notices with the state Labor Department that layoffs would begin on Dec. 12 at three Hudson County hospitals. Hoboken University Medical Center will cut 900 positions, Bayonne Medical Center will drop 859 and Christ Hospital in Jersey City will eliminate 843.
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The three hospitals are not “facing any imminent threat of closure and no final decisions regarding layoffs have been made at this time,” Sofia Quintanar, a CarePoint spokesperson, said in a statement.
The news comes as many members of New Jersey’s massive health care industry are experiencing unprecedented growth. Hospital systems across the state are conducting major expansion efforts, from Valley Health’s new hospital in Paramus to Hackensack Meridian Health’s announcement last week that it was more than halfway toward its $1 billion fundraising goal.
Asked for $130 million bailout from Legislature
But CarePoint has been beset by problems for years. It has struggled financially to such a degree that executives asked Gov. Phil Murphy and the Legislature for a $130 million bailout last year. It has been sued by dozens of creditors in the past two years who say they have not been fully paid.
More: After near historic hiring levels, NJ saw third straight month of job losses in August
The company is “exploring various strategic financial restructuring options” to avoid layoffs and keep the hospitals open, Quintanar said.
The three hospitals have long had financial problems. CarePoint’s owners — Vivek Garipalli, James Lawler and Jeffrey Mandler — bought them more than a decade ago as they each faced bankruptcy under prior owners. CarePoint made them for-profit entities, stabilized their finances, made some physical improvements and kept them open.
It also quickly established them as some of the most expensive hospitals in the U.S. despite their modest reputation. Its business model centered around high out-of-network billing in emergency departments to boost revenues.
At one point last decade, Bayonne Medical Center charged more than any other hospital in the nation for some of the most common diagnoses for at least three years in a row. One woman was charged $225,000 for a pacemaker procedure and a hospital stay of less than three days.
CarePoint’s owners were cited by state investigators in 2019 for taking $158 million in “management fees” over several years.
CarePoint switched to nonprofit status recently in a bid to raise money via donors and apply for state aid.
It has received at least $8 million in emergency funds this year to cover payroll, the Jersey Journal reported. It’s much less than the $130 million CarePoint executives requested from the state last year, saying it was needed to continue operations.
Last week, some Hudson County officials — including Jersey City Mayor Steve Fulop and Hoboken Mayor Ravi Bhalla — said they will join the CarePoint board of directors to come up with a plan to keep the hospitals open, the Hudson County View reported.
This article originally appeared on NorthJersey.com: North Jersey hospital chain warns it may lay off 2,600
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