UMDNJ Merger a 'Win for Newark'

Correction appended July 5

State and local lawmakers gathered yesterday at the University of Medicine and Dentistry of New Jersey to celebrate the final version of legislation merging most UMDNJ assets with Rutgers University -- a merger that as originally conceived would have deprived Newark of its standing as a major medical research and training hub, those officials said. 

Instead, according to Mayor Cory Booker, Speaker of the Assembly Sheila Oliver and others present yesterday, the legislation leaves intact all of the academic and medical facilities that now call the city home, establishes a chancellor position based in the city, and will have no effect on the status of any employees within the current UMDNJ system.

The legislation -- the New Jersey Medical and Health Sciences Higher Education Act -- passed last week in Trenton, has yet to be signed by Gov. Chris Christie, but he has already expressed his support and is expected to approve it.

With the legislation’s stated goal of launching Rutgers University into the top tier of the nation’s  research institutions, the city can expect to see even more medical students, increased economic development and “improved health outcomes” for city residents, according to Denise Rodgers, UMDNJ’s interim president.

“Many of us view UMDNJ in Newark as sacred ground,” Oliver said, later adding that the merger “is not a corporate takeover. It’s a marriage.”

“We were facing a developing UMDNJ advisory committee plan that would have hurt Newark and been suboptimal for New Jersey as a whole. We worked with stakeholders at home and across the state to turn this crisis into an opportunity to address Newark’s higher education and health care challenges. Today, I’m happy to report that we succeeded. This legislation is a win for Newark, it is a win for Rutgers, it is a win for medical higher education, it is a win for our hospital, and it is a win for New Jersey,” Booker said in a statement.

The University of Medicine and Dentistry consists of a variety of assets, including: the Newark-based New Jersey Medical School; University Hospital, a teaching hospital also based in Newark; Robert Wood Johnson Medical School in New Brunswick*; the School of Osteopathic Medicine in Stratford, in South Jersey; a dental school and other institutions.

The legislation would: 

• Place nearly all of UMDNJ’s schools under the Rutgers umbrella, with the exception of the School of Osteopathic Medicine in South Jersey. This school will become part of Rowan University in Camden. The Rutgers-Camden campus will be a research partner with this school as well.

• Create the Rutgers School of Biomedical and Health Sciences, which would be based  in Newark. This would consist of what are now UMDNJ assets -- with the exception of University Hospital -- as well as the Rutgers schools of nursing, pharmacy and various research institutes.

• Leave University Hospital as a stand-alone, but still public, medical facility. While the hospital would not become part of Rutgers, it would serve as a teaching hospital for Rutgers students. 

With so many moving parts and so many stakeholders, there was no small amount of deal-making involved in passing the 130-page act.

 The addition of the School of Osteopathic Medicine, now part of UMDNJ,  to Rowan has led some to speculate that the move was meant to satisfy George Norcross, one of the most powerful figures in Camden County and state Democratic Party circles. Norcross’s brother Donald, a state senator, is a sponsor of the act.

Oliver yesterday denied that the part of the legislation affecting South Jersey was a sop to Norcross, who “wasn’t in the mix” when a proposal to merge UMDNJ and Rutgers was first proposed nearly a decade ago.

The state’s higher education administrators also got something they had long been seeking -- cash for capital improvements to their facilities. Rutgers’ board of trustees signed off on the merger deal within days of the Legislature authorizing a $750 million bond referendum that, if approved by voters, would be used for campuses across the state. Another $500 million in borrowing would also be dedicated to the schools, Oliver said, bringing the total package to more than $1 billion.

Language within the law also reaffirms University Hospital’s mission to serve the people of Newark and the surrounding region. The hospital was founded as part of the Newark Agreements, an accord reached between state and local officials following the Newark riots of 1967.

The agreements state that, in exchange for the city donating nearly 60 acres of land for the construction of a hospital, the facility would place a particular focus on the needs of Newark residents. The agreements lacked the force of law, and still would under the restructuring, but many of their objectives are explicitly stated in the act passed last week, lending them even more weight than they had previously.

The restructuring act does leave open the possibility of University Hospital being privatized, but at the same time, other language also makes that a very remote possibility. According to the act, University Hospital workers already in the state system would continue to be state employees, an unusual arrangement that would likely scare off most prospective buyers.

The act  would also leave University with its own dedicated budget and management focused on the hospital’s primary mission: delivering medical care. As a part of the UMDNJ system, the same funding that was spent on the teaching and research side was also used for patient-care needs, sometimes forcing administrators to choose between the two.

University Hospital, regardless of the merger, still faces challenges, not least of which is debt. System-wide, UMDNJ is hundreds of millions in the red, which the merger is partly intended to adress. While the debt has yet to be apportioned precisely among the various UMDNJ components, by one estimate University's share is about $100 million.

To read the full text of the New Jersey Medical and Health Sciences Higher Education Act, click here .

*The article originally stated that Robert Wood Johnson Hospital, not the medical school, was part of UMDNJ. Robert Wood Johnson Hospital does have a partnership with UMDNJ.