Bacharach looks to the future after announcing the acquisition of Select Medical (2023)

GALLOWAY TOWNSHIP — The pressures affecting small healthcare providers across the country are ending an era of rehabilitative care in the area.

The Bacharach Rehabilitation Institute agreed in September for Select Medical to purchase its licensed beds, with which Select would build a new rehabilitation hospital, operating under the Bacharach name. AtlantiCare is set to acquire the Bacharach facility located next to its Mainland Campus hospital as part of the deal.

The agreements are pending approval by various state agencies.

The deal will create a more sustainable future for rehabilitation healthcare in the area, said Richard Kathrins, Bacharach's director of policy.

“I think the advantage here is that Select brings a lot to the table, they are a national provider of rehabilitation services, they have great resources at their disposal,” Kathrins said. “I think Select will be a wonderful partner for the community in the long run, and I think there's sustainability there, I think there's quality there, I think they'll do a good job for the community.”

A Select spokesman said no further details were available on the new rehabilitation hospital as it was still obtaining state regulatory approval. The new facility will provide treatment for a variety of illnesses, including brain injuries, cancer, spinal cord injuries, and stroke.

“Our plans are to build a new, state-of-the-art rehabilitation hospital,” Shelly Eckenroth, a Select spokeswoman, said in an email Wednesday. "As with Select Medical's 30 other inpatient rehabilitation hospitals across the country, including the Kessler Institute for Rehabilitation (in Marlton), our commitment will be to help patients regain function and independence for life. daily life".

Kathrins said Bacharach has struggled financially in recent years. The company struggled with growing healthcare technology and regulatory costs that all hospitals often face, something that can be especially difficult for a smaller hospital, Kathrins said. There have also been changes in the rate of patient referrals due to managed care plans and hospitalizations, as well as the difficulties created by the COVID-19 pandemic.

“These issues have combined to create a financial picture that is difficult to beat,” Kathrins said.

Bacharach has a storied legacy in the region. It was founded in 1924 in Longport, operating as a facility providing rehabilitative care for pediatric patients. It soon gained a national reputation for specific pediatric treatments, regularly drawing Philadelphia children and families seeking therapy and the restorative salty air of the Jersey shore.

“It all came together and became part of the Atlantic City institution,” Kathrins said. “It became part of the environment.”

Bacharach moved to its current location in Galloway in 1972, three years before the opening of what is now the AtlantiCare Regional Medical Center Continental Campus. Soon after, the institute moved away from pediatric care and became an adult rehabilitation hospital, receiving the state's specialty hospital designation. It remains an adult rehabilitation hospital, offering a variety of inpatient programs, including those treating brain and spinal cord injuries, stroke, and neurological and orthopedic disorders. It also continues to provide pediatric care.

One of the most critical challenges Bacharach has faced has been the growth of managed health insurance plans, such as the Medicare Advantage and Medicare Shared Savings programs. With stricter rules about when someone can be admitted to a rehabilitation hospital, many patients who would otherwise receive treatment at Bacharach are denied admission. Patients are often referred to lower levels of care, such as a nursing home, draining Bacharach of patients and revenue in the process, Kathrins said.

"Patients that we think are appropriate based on Medicare guidelines, someone else at the insurance company thinks they're not appropriate," Kathrins said.

Kathrins said he was encouraged that government officials were beginning to realize the obstacles that some health care plans presented for institutions like Bacharach.

“The goal is to reduce costs, so they may not want to send a patient to a high-quality rehab hospital instead of a lower-cost (center),” Kathrins said. "There's a lot of research in terms of the value of the outcome (in rehab hospitals) versus the outcomes in nursing homes and so on."

These financial challenges have been exacerbated by the pandemic. Public health closures implemented in 2020 have reduced the volume of admissions to rehab centers like Bacharach, further reducing the center's revenue.

Kathrins said Bacharach was vulnerable to these financial challenges due to its status as a small, unaffiliated, not-for-profit hospital.

“If you look at South Jersey, New Jersey, across the country, the number of small charter hospitals continues to decline,” Kathrins said.

The acquisition of Bacharach's licensed beds comes at a time when the region's smaller hospitals are being taken over by their larger counterparts. Cape Regional Health System, which operates Cape May County's only hospital, entered into a merger agreement with Cooper University Health Care of Camden in December.

“I think there is a growing trend toward consolidation,” Kathrins said. "It's hard to argue with that."

Kathrins said Bacharach was optimistic that the Select Medical acquisition could help improve health care outcomes in the area. She noted that Select Medical operates the Kessler Institute for Rehabilitation, which US News & World Report ranked as the fourth best rehabilitation hospital in the nation. Bacharach's healthcare professionals had previously collaborated with physicians at Select hospitals and were impressed with his expertise and dedication.

Select Medical operates 30 inpatient rehabilitation hospitals and employs more than 7,500 therapists, according to its website. It is based in Mechanicsburg, Pennsylvania and owns NovaCare Rehabilitation.

“We got to know his clinical acumen, his commitment to the community,” Kathrins said.

Kathrins said the new Select facility will have little continuity with Bacharach, and generally no Bacharach employees will transfer to the new Select facility. There will be a gap between the closure of the Bacharach facility and the opening of the new Select rehabilitation hospital.

An AtlantiCare spokesperson said in an email Monday that the company had not yet decided what purpose the Bacharach facility would be used for. It would not be used as an acute rehabilitation facility, as these services are not provided at AtlantiCare, although referrals are made to appropriate providers. The health care company did not have a timeline for when it would start using the facility, due to pending state regulatory approvals. Bacharach's name will not be retained on the operation performed by AtlantiCare.

“We are evaluating and planning for our hospital expansion to ensure our community has the most appropriate and comprehensive care it needs,” said AtlantiCare spokeswoman Jennifer Tornetta.

It's not the end of Bacharach as an institution in the Atlantic City area. The Bacharach Hospital Foundation will continue to operate after the closure of the Bacharach Rehabilitation Institute. Kathrins said the foundation could support healthcare on multiple fronts, perhaps by supporting research, creating grants or helping other clinical programs or partnering with local universities. Kathrins said the foundation is still exploring its options.

Kathrins acknowledged that the acquisition will be difficult for the people who joined Bacharach, as well as current Bacharach employees, some of whom have worked at the hospital for decades. However, she expressed optimism that the deal would ultimately benefit the residents Bacharach has long served.

“It's a sad time, but I think in the long term it's a good opportunity for the community, for sustainability and growth,” Kathrins said. "I think that, in the end, it is a victory for everyone, even if it seems painful, sad now."