RWJBarnabas Health, Saint Peter's Healthcare System move closer to merger

The healthcare systems aim to create a premier academic medical center. The deal still requires the approval of federal regulators.

New Jersey state regulators have signed off on the planned merger of RWJBarnabas Health and the Saint Peter’s Healthcare System.

The two systems announced plans to come together in 2020. The organizations announced May 16 they received the approval of New Jersey state officials.

RWJBarnabas and Saint Peter’s both say they want to create what they describe as New Jersey’s first premier academic medical center in New Brunswick. The organizations said the move would also help establish Rutgers University as one of the nation’s most prestigious medical research and teaching schools and will help it attract world-class talent. Rugters’ flagship campus is in New Brunswick.

The Federal Trade Commission still must sign off on the deal, but the systems now have state approval in hand.

While the two systems signed a definitive agreement outlining their “intention to integrate” in September 2020, they first began exploring a strategic partnership in 2019.

RWJBarnabas Health CEO Barry Ostrowsky described securing state approval as “a tremendous milestone in a years-long journey.”

"As densely populated and historically rooted in biomedical research and innovation as New Jersey is, it is incredible to me that our state has never had a premier academic medical center that can unlock opportunities for medical discovery and make high-quality care more accessible and affordable for everyone,” he said in a news release. “For too long, New Jerseyans have endured the cost and inconvenience of traveling out of state to receive highly specialized care, when they should be able to get it right here at home.”

RWJBarnabas Health operates 11 hospitals, 4 children’s hospitals and dozens of other care sites. Saint Peter’s, a Catholic system, operates a 478-bed acute-care hospital and a children’s hospital. Under the agreement to integrate, Saint Peters would continue operating as a Catholic healthcare provider.

Saint Peter's Healthcare System President and CEO Leslie D. Hirsch said in a statement, “We are jointly committed to providing high-quality, affordable care to our patients and every New Jersey resident, especially the most vulnerable in our communities.”

"State approval now puts us on the cusp of being able to create New Jersey's first multi-campus premier academic medical center that will draw top talent, increased research funding, and more opportunities for groundbreaking clinical trials, while also enhancing specialized services and improving overall patient care.”

President Biden’s administration has directed federal regulators to closely examine mergers and acquisitions in all industries, including healthcare and hospital systems. In an executive order last year, Biden directed his administration to apply close scrutiny to healthcare mergers to ensure competition and guard against higher costs for consumers.

The organizations note they have received the backing of Horizon Blue Cross Blue Shield and Aetna Better Health, the New Jersey Business & Industry Association, along with several top New Jersey lawmakers and trade organizations.

RWJBarnabas Health has said it would invest in the facilities and technology of Saint Peter’s and aim to expand clinical services.

There have been only a small number of healthcare mergers so far in 2022, but analysts expect more deals to happen as the year progresses. Analysts project some smaller, independent hospitals that are on shaky financial ground may need to find partners to stay afloat.

Intermountain Healthcare completed its merger with SCL Health last month. City of Hope completed its acquisition of Cancer Treatment Centers of America in February.