Big changes at Kimball Medical Center could represent the future of Jersey Shore hospitals

Jan. 24--At Kimball Medical Center's 100th anniversary last spring, dignitaries put items such as an old-fashioned medical bag and a stethoscope into a time capsule to be opened in another 100 years.

The time capsule still will be there, but Kimball won't.

The Lakewood hospital is slated to become part of Monmouth Medical Center and recast into a smaller, satellite facility as part of a plan by their parent company, Barnabas Health, to provide health care to the community and stem the losses of millions of dollars a year.

With the change may come pain; nurses are bracing for job cuts. But it also can be seen as a bellwether for hospitals statewide. In the age of health reform, both private insurers and the government want their customers to stay out of hospitals, where the cost for care is expensive.

"We've seen this elsewhere, where these hospitals are fairly close to one another," said Eva Thein, an analyst who follows Barnabas Health for Fitch Ratings in New York. "The rationalization of services between closely located facilities makes sense."

The Affordable Care Act, also known as Obamacare, has ushered in cost restraints, perhaps the final nail for Kimball.

The hospital, named after Lakewood physician Paul Kimball, was founded in 1913, two years after his death. It had 16 beds, nine physicians and a well-to-do community to serve. Lakewood's visitors included four presidents and Andrew Carnegie. Its seasonal residents included John D. Rockefeller, according to an historical account by Georgian Court University, which itself was once home to millionaire financier George Jay Gould, son of 19th century railroad magnate Jay Gould.

The town's demographics have changed. From 2008 to 2012, Lakewood's median income was $37,252, compared with $71,637 in New Jersey. One-third of its residents live below the poverty level. And it has 26,000 undocumented workers, according to the U.S. Census Bureau and state Sen. Robert Singer, R-Ocean.

Some 80 percent of Kimball's patients were insured by government programs Medicaid, Medicare or charity care, Barnabas said, and it's not a lucrative mix. A study by the Center for Studying Health System Change in Washington, D.C., found the average Medicare payment rate per discharge for hospitals in 2009 was $11,031, while the average private rate was $17,286.

The result: Kimball in 2012 reported an operating loss of $3.4 million.

Monmouth Medical Center in Long Branch also is in an urban setting. But it is an academic medical center that has attracted more doctors, developed specialized programs and seen overall volume grow. It reported an operating profit of $26.3 million in 2012, according to a financial report by KPMG that was available online.

And numbers show Kimball wasn't well suited to care for the community. For example, it didn't have a neonatal intensive care unit to treat premature and ill babies, meaning that about half of all Lakewood babies are born at Monmouth Medical instead. It left Kimball to deliver only 16 percent of the town's babies each year, Barnabas said.

Barnabas officials said they plan to close Kimball's maternity ward.

They envision the merger working like this: Kimball and Monmouth Medical opened the Jacqueline M. Wilentz Breast Centers in Howell and Lakewood during the past two years. The sites are connected through a communication system to Monmouth Medical, where radiologists read the images. Mammography screenings in Lakewood grew 53 percent, spokeswoman Carrie Cristello said.

The hospital merger needs regulatory approval. It is expected to go into effect this spring.

Layoffs coming

The technology can produce oohs and ahs, but workers at Kimball are nervous. The company has acknowledged the plan will come with layoffs, but it wouldn't say how many. (It said it would work with affected employees to find jobs for them elsewhere).

Worker representatives said the outcome was the result of bad management.

"The system has not put any funding into Kimball to update equipment, to attract doctors, to change the facility itself," said Maria Refinski, president of New Jersey Nurses Union, Communication Workers of America Local 1091, which represents 274 nurses at Kimball.

"If you want to produce you've got to put some resources into it," Refinski said. "I would say, no they have not (put resources in it). Now they want to put $11 million into the facility to make those 48 beds into single-patient rooms and rebrick the facade. They could use those funds to help our nurses laid off, or update equipment, redo the (operating rooms). This is going to be a huge loss for that community."

Thein, from Fitch Ratings, said mergers aren't easy. Doctors from Monmouth Medical will need to travel 25 miles to get to Lakewood. But under the Affordable Care Act, government reimbursements to hospitals are only going to get tighter, particularly for hospitals that don't deliver high-quality care.

To Singer, a former Barnabas vice president, the merger is the best option available.

Kimball is "a safety-net hospital for the area," he said. "It takes care of the uninsured, underinsured. The question is, how do you lessen the loss impact, how do you provide better service, how do you attract more people with insurance? You bring in more specialties and more services."

Michael L. Diamond; 732-643-4038; mdiamond@app.com

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