Sale of Newark's Saint Michael's Medical Center Clears Major Hurdle

The long delayed sale of Saint Michael's Medical Center in Newark to Prime Healthcare Services took one giant step forward when the state Department of Health deemed its application for a Certificate of Need complete nearly three years after it was first submitted.

Saint Michael’s initially submitted the Certificate of Need application to sell the hospital on April 1, 2013. Hospital officials responded to eight rounds of extensive follow-up questions from the Health Department before receiving word of the application’s completeness on Dec. 1.

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The sale of Saint Michael's Medical Center in Newark to Prime Healthcare Services moved one step closer to reality.

“We are excited by this latest development since it now means we can move forward to the next step,” said David A. Ricci, president and CEO of Saint Michael’s Medical Center. “Achieving this milestone gives all of us renewed energy as we strive to achieve our goal of preserving Saint Michael's for the good of the 1,400 employees and their families who work here, for the members of our medical staff who have remained loyal to our community and most especially to the greater Newark community, which remains dependent on the services and care that we provide.”

The Department of Health has scheduled a public hearing regarding the application on Tuesday, Dec. 15, 2015, from 6-8 p.m., at the New Jersey Institute of Technology, Campus Center Atrium, 150 Bleeker Street in Newark. The hearing is free and open to the public.

Councilwoman Gayle Chaneyfield Jenkins, who has been leading the effort to save the hospital, said she is looking forward to testifying in support of the sale of Saint Michael's to Prime.

"As the elected representative of the Central Ward, I am looking forward to testifying about how important it is to the community that the state approve the sale of Saint Michael's to Prime," Chaneyfield Jenkins said.

"We have waited three long years for this sale to go through and our hospital and our community have suffered because of the state's unnecessary delays," Chaneyfield Jenkins said. "More than 1,400 hospital employees, many of them who live here in Newark, didn't know if they would still have a job. The hospital lost top physicians because of the uncertainty of Saint Michael's future."

Once the hearing is complete, the State Health Planning Board will meet early next year to consider the application and make recommendations to acting state Health Commissioner Cathleen Bennett on whether the sale should be approved. In addition, acting state Attorney General John Jay Hoffman must approve the sale.

“Prime Healthcare remains as committed as ever to continuing the legacy of Saint Michael’s and ensuring the community is afforded the best patient care while upholding the traditions of the medical center,” said Luis Leon, President of Operations II of Prime Healthcare Services. “We are grateful for the state’s action to move forward in this important process, and we look forward to an engaging and constructive community dialogue.”

"Prime's plan to invest $50 million into upgrading Saint Michael's is a game changer for our community," Chaneyfield Jenkins said. "Not only will this investment create jobs in our community, but our residents will have a world-class, modern medical facility for their healthcare needs. If this sale doesn't go through, the alternative would be catastrophic to our community."

On August 10 of this year, Saint Michael’s voluntarily filed for Reorganization under Chapter 11, an action Prime agreed was necessary to preserve the medical center’s financial viability following the protracted application process. Last month, the U.S Bankruptcy Court for the District of New Jersey approved Prime Healthcare’s $62 million offer to buy the hospital; the Honorable Judge Vincent F. Papalia issued an order to proceed with the acquisition.

Both Ricci and Leon credited the community’s involvement in maintaining pressure on the state to preserve the hospital. A coalition of residents, patients, clergy, union members, community leaders, clergy and elected officials led by Chaneyfield collected more than 40,000 signatures urging the state to approve the sale.

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