Sweeney Bill To Support Salem Hospital & Regional Medical Care Gains Senate Approval

TRENTON – Legislation sponsored by Senate President Steve Sweeney that would allow the charitable assets set aside from the sale of a nonprofit hospital to a for-profit entity to be made available if the hospital is sold again to a successor nonprofit entity. Senator Sweeney wants to ensure the $54 million, currently in the trust fund managed by the Salem Health and Wellness Foundation, is used to facilitate the sale of Salem Memorial Hospital to a new owner that will ensure the long term access to acute care services in Salem County.

“This money belongs to the people of Salem County and is supposed to be used to support medical care in the area,” said Senator Sweeney. “The funds are a key ingredient to facilitate the sale to a non-profit that will keep the hospital open and provide medical care for the region. Salem Memorial is the only acute care facility in the region and it is needed to provide medical care.”

Community Health Systems is currently trying to complete a sale with Inspira but the resources from the trust fund are integral to the transaction. The money, designated as “charitable assets,” was previously sent by the Salem Foundation to the Community Foundation of New Jersey, located in Morris County.

The long-term viability of the hospital is dependent on the funds from the nonprofit Salem organization, Senator Sweeney said. The hospital has been losing money, staff and patients over the past decade, according to papers filed with the Department of Health. During its ownership under CHS, the hospital has closed its maternity ward and gone from a state-registered 140-bed facility to a 126-bed facility.

The hospital is also one of the county’s major employers.

“There is a risk that the hospital would be forced to close, which would be catastrophic for the region,” said Senator Sweeney. “The Health Department said that a transfer of the hospital assets will strengthen the hospital, positioning it to meet the health care needs of the residents of Salem County in the most optimal manner.”

The reversion of assets to the nonprofit charitable entity would occur upon the determination by the Superior Court that the allocation of the assets to the acquiring nonprofit charitable entity would be more consistent with the original nonprofit hospital’s purpose.

The legislation, S-2247, entitled the “Community Health Care Assets Protection Act:” http://www.njleg.state.nj.us/2018/Bills/S2500/2247_I1.HTM.

The non-profit hospital was sold in 2002 for $35 million to the for-profit Community Health Systems. Proceeds from the sale went to create the Salem Health and Wellness Foundation to provide health services in the county that the hospital did not provide. The value of the fund has increased to $51 million.

The Senate vote was 38 – 0.