New Pascack Valley Hospital Partners Predict 14% Profit Margin

Hackensack University Medical Center at Pascack Valley (N.J.), a joint venture between non-profit Hackensack (N.J.) University Medical Center and for-profit hospital management company LHP Hospital Group, is expected to record a profit margin of 14 percent, according to a North Jersey Media Group report.

Although the reopened hospital's business plan has not been released, several factors could put the hospital into strong financial outcomes. HackensackUMC at Pascack Valley has a high insured payor mix, no current debt and will hire new staff with no current union contracts or outstanding pension obligations, according to the report.

Last year, the average operating margin for a New Jersey hospital was 2.4 percent, and community hospitals across the country had a 5.5 percent operating margin in 2010. However, some believe the state must keep an eye on the new Pascack Valley hospital so its current business plan does not overtake its original goal of providing healthcare back to the community.

"The health department has to stay on top of this," said Fred Jacobs, MD, JD, former New Jersey health commissioner, in the report. "Here you have a for-profit organization, so it's intrinsically suspect. Their primary fiduciary responsibility is to increase the value for their investors. But you can't scrimp on quality healthcare and vital services."

More Articles on Pascack Valley Hospital:

Englewood Hospital Appeals HackensackUMC's CON to Reopen Former Hospital

HackensackUMC Finally Gains Approval to Open Pascack Valley Hospital in NJ

Hackensack University Medical Center Set to Renovate Pascack Valley Hospital

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