County plans to approve study on privatizing Runnells Hospital

Although two years ago the county was completely against privatizing, leasing or selling Runnells Specialized Hospital of Union County, things have changed significantly.

The county, which owns and operates the 100-year-old, 300-bed, long-term

The county approved a measure to study the possible privatization of Runnells Hospital.

facility and 44 in-patient psychiatric facility in Berkeley Heights, recently laid off 80 employees in order to cut costs. But it barely made a dent in the $11.3 million deficit the county was carrying with Runnells.

In July the county moved to privatize the housekeeping and dietary services at the hospital by contracting with Sodexo, a leading provider of integrated food and facilities management services. The company has 413,000 employees in 80 countries, serving 10 million customers in 8,000 locations. But even though the county has already managed to save $2 million, will save another $443,000 for the remainder of this year and expects approximately $1.6 million in savings next year, it barely dented the huge deficit.

This left just one thing for the county to do: investigate all options concerning this hospital that has been operating in the red for years.

Thursday, Sept. 13,  the Union County Freeholder Board unanimously approved a $60,000 contract that paves the way for a Pennsylvania-based company, Complete Health Resources Eastern Inc., to do a study within 60 days that will determine if the facility can be sold, leased or further privatized.

The measure was expected to easily pass muster with the board because last week at their agenda meeting the freeholders voted unanimously to place the contract up for a vote on Thursday, Sept. 13.

Recently the county put out a request for proposals for analysis and development options for Runnells. This was the latest attempt by the freeholder board to find a way to cut costs at Runnells.

The RFP specifically asked that any company responding to the request be able to perform various options, including the complete sale or lease of the facility, privatizing the operations that have not already been privatized or “maintain operations but enhance the revenues through stand-alone short-term rehabilitation programs, other specialized services, insurance reimbursement or other means.”

While privatizing the hospitals housekeeping and dietary services will save the county $2 million over a 16-month contract, it will barely scratch the surface of the financial drain the hospital continues to be in year after year. However, the 2011 deficit actually is lower than 2010 when the county facility ran a $14 million deficit and it became the subject of much contention at the 2010 freeholder election debate.

At that time Republican challengers suggested that Runnells was a financial drain on taxpayers, but Freeholder Daniel Sullivan, who was running for reelection, begged to differ.

“Don’t be misled by what you are hearing here tonight. When you hear ‘We’re going to examine this, we’re going to look at it,’ they have a plan to get rid of it,” Sullivan said, adding that the county lost both Muhlenberg and Union hospitals, which left no local facility for seniors to seek medical help in an emergency.

At the same debate Freeholder Bette Jane Kowalski backed up Sullivan, assuring the Democratic Freeholder board had “made sure Runnells’ is self sustaining economically and is moving very solidly in the future,” which was true according to the last fiscal statements available at the time of the debate. However, this was the same year Runnells ran a $14 million deficit, which was not known until months later.

Neither Sullivan nor Kowalski, who reiterated her support of the county-owned facility at the debate, offered any plan to cut costs at Runnells or propose a means to operate the hospital at a profit.

At the 2010 debate, Republican challengers Ellen Dickson, now mayor ofSummit, along with running mate Brian Flanagan, suggested that while they would not want to see Runnells sold, they did think a study was definitely in order to examine what was causing the hospital to run at such a huge deficit. Sullivan bristled at this and shot back exactly how he felt about their suggestion of a study.

“They have a plan and that plan is to get rid of it,” he said of Runnells.

Kowalski, on the other hand, despite having served on the board for many years and aware of the $14 million deficit the hospital had that year, argued the hospital should remain a part of the county budget because the care at this hospital was tailored to senior citizens. She also seemed unaware that Runnells was running at a $14 million deficit that year.

“It is an extremely successful institution,” she said, referring to the county-owned facility.



In a previous version of this story,  published in print on Sept. 13, on Page 1, LocalSource incorrectly represented the employment of three individuals at Runnels Hospital.

Barbara Baldasare and former hospital administrator Joseph Sharp both stopped working for the facility about two years ago, and Joan Wheeler was hired by the hospital in 1991 and received her  Nursing Home Administrator License in 1996.

It is the policy of this newspaper to correct all significant errors that are brought to the editor’s attention.

If you believe that we have made such an error, email Regional Editor Patrick Bober at or call 908-686-7700 weekdays before 5 p.m.