Consolidation Continues, Financial Pressures Mount:

Publication Date: January 1999

Publisher: Center for Studying Health System Change

Author(s): Cara S. Lesser; Daniel S. Gaylin; Amy M. Andersen; Lawrence D. Brown

Research Area: Health

Type: Report

Coverage: New Jersey

Abstract:

In February 1999, a team of researchers visited northern New Jersey to study that community's health system, how it is changing and the impact of those changes on consumers. More than 60 leaders in the health care market were interviewed as part of the Community Tracking Study by the Center for Studying Health System Change (HSC) and The Lewin Group. Northern New Jersey is one of 12 communities tracked by HSC every two years through site visits and surveys. Individual community reports are published for each round of site visits. The first site visit to northern New Jersey, in April 1997, provided baseline information against which changes are being tracked. The northern New Jersey market studied is defined by the Newark primary metropolitan statistical area (PMSA) and includes Sussex, Warren, Morris, Essex and Union counties.(BREAK) At the time of HSC's 1997 site visit, hospitals in northern New Jersey had recently undergone extensive consolidation in response to hospital rate deregulation and expected managed care growth. The subsequent closure of one inner city hospital triggered concerns that services would become concentrated in the suburbs and access to care in the inner city would deteriorate. Since then, hospital merger activity has slowed. Dire predictions concerning access to care in the inner city and the viability of the local safety net have not materialized, although some downsizing has occurred. Meanwhile, health plan consolidation has proceeded swiftly due to national and local mergers.