PAINFUL AUDIT
State checked Med Center's red ink; then Metsch quit

September 26, 2006 Jersey Journal

The sea of red ink had been rising for years when, several months ago, Jonathan Metsch, the president and CEO of the Jersey City Medical Center, told state officials that the hospital needed $3 million more per month to keep afloat.

The hospital had received several one-shot subsidies before, state officials said yesterday. But before agreeing to this latest request, they wanted to make sure they weren't throwing good money after bad.

So they asked Metsch - who also heads the hospital's parent company, LibertyHealth - to conduct an audit, said state Health and Senior Services Commissioner Fred Jacobs.

The findings of that audit, prepared by the Chicago-based Wells Springs Partners, were presented to the LibertyHealth board last Thursday night, a meeting Jacobs attended.

The next day, after a lunch meeting with board members, Metsch quit.

Neither Metsch nor other board members could be reached yesterday to shed light on the abrupt resignation.

But Jacobs, who considers Metsch a "valued friend and colleague," said yesterday that there's no doubt the move is related to the audit.

"It's all tied together," Jacobs said, referring not only to the audit and Metsch's resignation but to the difficult financial environment the hospital has been operating in.

Still, Jacobs said that "no one called for Dr. Metsch's resignation" during the Thursday night board meeting.

Sixty-five percent of the Medical Center's patients are either uninsured or Medicaid recipients, Jacobs said.

To help cover the bills of the uninsured, the state - following a strict formula - gave the center roughly $52.2 million in charity care money this year and last. But the center's actual charity care expenses have averaged $77 million a year for the past three years, said Matt D'Oria, the department's deputy commissioner.

"When you have that kind of patient mix it is very difficult," D'Oria said.

The audit, which neither the state nor a spokesman for the hospital would release, made several recommendations - chief among them hiring a vice president for medical affairs, officials said.

This person would be responsible for instituting programs that would lead to a reduction in the length of stays at the hospital, one of the major financial drains on the hospital, Jacobs said.

The audit also pointed out that several vendor contracts could be restructured so the hospital pays less, officials said. The audit also recommended ways to improve bill collection and management of the emergency room.