Lakewood, NJ – Kimball Medical Center Denies Talk of Closing But Acknowledges $8M Deficit

Lakewood, NJ – Facing an $8 million loss this year, Kimball Medical Center is being considered for closure, a national bond rating service reported, as the hospital’s parent company Saint Barnabas Health Care System tries to haul itself from the red by 2009.

A Kimball representative denied the claim.
“Kimball Medical Center is not closing,” the hospital’s executive director, Joe Hicks, said in an e-mailed statement, while acknowledging the $8 million deficit. “These are extremely difficult times in the health care industry, and we continue to look at all avenues to reduce expenses and maintain quality and efficiency.”

The hospital administration did lay off two employees who were “selected in order to retain care at the bedside and did not affect any programs or services,” he said.
Hicks did not say whether further reductions were expected.

Saint Barnabas, the largest health care system in the state, has lost $52.5 million in the last three years. That, coupled with the continuing burden of paying off a six-year, $265 million settlement over federal Medicare fraud charges, has forced management to draw up a plan to cut $70 to $80 million in expenses by 2009, according to MarketWatch, a financial information Web site.

Recently, Fitch Ratings downgraded Saint Barnabas’s bonds to below “noninvestment grade,” said Carolyn Tain, senior director at Fitch, which evaluates credit ratings of companies.
Tain said Fitch was told by Saint Barnabas Chief Finacial Officier Tom Scott that management is considering the options of closing Kimball, selling it or giving it to Lakewood.

Lakewood Mayor Raymond Coles said the township’s budget could never support a takeover of Kimball. Shutting it down, he said, “would be devastating not only for our residents but for the surrounding hospitals like Brick (Ocean Medical Center) and Community (Medical Center in Toms River) that would have to assume so much of that charity care that Kimball now absorbs.”

The 95-year-old hospital has 350 beds and employs nearly 1,000 workers and more than 450 physicians.

State Sen. and Township Committeeman Robert Singer, who until recently was a Kimball board member, said he has not heard any discussion about closing Kimball.
“If you notice, the $44 million from the state — they gave that to critical hospitals that can’t close. That’s a tell-tale sign,” he said, referring to money the state gave six financially distressed hospitals this month, of which Kimball received $1 million.

Marilyn Riley, spokeswomen for the state’s Department of Health and Senior Services, said the hospital has not filed a Certificate of Need to close.
“And beyond that I can’t speculate,” she said.

Hicks said, the loss is directly related to the extreme shortfall in reimbursement from the state and federal government for the care it provides to Medicare, Medicaid and Charity Care patients,” Hicks wrote in an e-mail.
Saint Barnabas reports it is reimbursed less than half of the more than $120 million it spends on charity care.