Kaufman Hall Advised on Formation of New Jersey's Largest Health System

SKOKIE, Ill. – January 4, 2016 – Barnabas Health and Robert Wood Johnson (RWJ) Health System earlier this week signed a definitive agreement to merge and create New Jersey’s largest health care system and one of the largest in the nation -- to be known as RWJ Barnabas Health. Kaufman Hall advised both parties on the planned merger, which is another example of the new health companies that are forming to meet the demands of the evolving healthcare landscape.

Once finalized, RWJ Barnabas Health will annually represent operating revenues of more than $4.5 billion, 260,000 inpatient admissions, 2 million outpatient visits, nearly 700,000 Emergency Department visits, 23,000 births, nearly 30,000 employees, 9,000 physicians, and 1,000 residents and interns.   The new system will be comprised of 11 acute care hospitals, 3 children’s hospitals, a pediatric rehabilitation hospital, a behavioral health care center, ambulatory care centers, and five fitness and wellness centers.

The new systems’ geographic coverage will span Hudson, Essex, Union, Middlesex, Mercer, Somerset, Monmouth and Ocean counties.  Through sharing of resources and best practices, the merger will promote the highest quality health care delivery and also enable greater economies of scale.

“The new health system will comprise effectively every clinical service from primary to quaternary and greatly strengthen our commitment to medical education and research,” stated Barry H. Ostrowsky, President and Chief Executive Officer of Barnabas Health. “The merger also will provide a large enough geography to be appropriate for the migration to population health management.”

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As advisor to Barnabas Health and Robert Wood Johnson Health System on this merger, Kaufman Hall facilitated a series of joint meetings with the CEOs of both systems to develop the business case that provides the strategic and financial rationale for the partnership.

The systems have formed transition teams to begin planning for combining the two systems.  Under the terms of the agreement, Mr. Ostrowsky will serve as the inaugural President and Chief Executive Officer of RWJ Barnabas Health.  Mr. Jones will serve as Chief Academic Officer in the Office of the President, leading efforts to further strengthen the relationship between the new entity and its academic partner, Rutgers University.  The Board of Trustees representation will be evenly divided between the two organizations.

“We are excited to move forward with this historic merger agreement which will offer the diverse communities in New Jersey expanded access to the best in academic medicine and community-based care,” said Stephen K. Jones, President and Chief Executive Officer of Robert Wood Johnson University Hospital and Robert Wood Johnson Health System.

To learn more about how Kaufman Hall is facilitating partnerships between healthcare organizations, contact Managing Director Kate Guelich kguelich@kaufmanhall.com.