Princeton HealthCare Exploring Partnership and Merger Options

Princeton Medical CEnterPrinceton Healthcare System, which relocated from downtown Princeton to a new hospital in Plainsboro three years ago, is evaluating options to partner or merge with another healthcare system.  CEO Barry S. Rabner told doctors in an email last week.

The new $522.7 million, 636,000-square-foot hospital with 231 single patient rooms broke ground in October 2008 and opened for business on May 22 of 2012.

“Partnering with another healthcare provider could help us build on our position of strength,” Rabner told doctors in the email. “It could help PHCS to adapt to new regulations and new and dramatically different ways in which health care is reimbursed.”

Princeton Healthcare borrowed $355 million to build the new hospital Plainsboro. Debt has been reduced by about $50 million using proceeds from the sale of the downtown Princeton hospital site and through debt payments.

The hospital employs 1,924 people and Princeton HealthCare employs more than 3,000 people systemwide. Rabner said Princeton HealthCare System is having one of the best years in its 96-year history.

“Most recently, our acute care hospital, the University Medical Center of Princeton, earned national recognition as one of only 40 hospitals nationwide that were named high performing for every procedure and medical condition for which we were rated in U.S. News & World Report’s Best Hospitals for Common Care ratings,” he said. “At the same time, we have achieved our best financial year ever.”

Rabner said the move to partner with another hospital is being considered in recognition of the fact that there will be significant changes in reimbursement, care delivery and coordination, information and clinical technology and other areas over the next two to five years.

“We are engaged in a thorough and thoughtful strategic planning process to determine how we can best remain a leading provider of healthcare services. As part of this planning process, the Board of Trustees has decided to evaluate partnership options to determine if we could be most successful in addressing our patients’ and the community’s future needs if we partnered with another organization,” he said.

“We are now determining what type of partnership we might want and the criteria we will consider when evaluating potential partners. PHCS is committed to transparency and we will keep our community informed of our progress and welcome their input along the way,” Rabner said.

Rabner said the decision to explore a potential partnership is one more step in a long-standing practice of planning, exploring options and initiating change for the good of the community.

Area hospital have faced increasing financial pressures and competition. Capital Health opened its new Hopewell campus the same year as Princeton HealthCare did. Capital Health also spent $100 million renovating its trauma center in Trenton.  Robert Wood Johnson University Hospital at Hamilton and New Brunswick, St Francis, and St. Peter’s Hospital are also competitors for patients in addition to hospitals in New York and Pennsylvania.


  1. I’m horrified by this news, but I can’t help but think that we just don’t deserve a local hospital trust. The hospital got run out of town, and then, when they tried to sell their old site, neighbors put them through the mill. I heard from somebody very close to the deal that AvalonBay was able to negotiate a really cheap price for the site because of all the drama, which just added further financial pressure on Princeton Healthcare System. I hope all the people involved in that shenanigans will be happy when our local community hospital trust sells up to some out-of-towners. I won’t be.

  2. For the record, the hospital was not run out of town by the neighbors. This consistent rumor has no basis in fact. Neighbors did have objections to the hospital buying up single family homes and converting them into offices against zoning. The fact is that the hospital on consultants observed that street were too narrow and clogged with traffic to accommodate emergency access and there was no room to build the expanded facility they desired on the footprint they owned nor would housing prices make buying up any more home a feasible. These facts along with the analysis that the majority of its patients come not from Princeton but from the other side of route 1 made the move out of town inevitable.

  3. The hospital could not have survived if it had stayed at its original site. I went to all the community outreach meetings with Barry Rabner the CEO of the hospital present. He is no fool and told us the best path for the survival of the hospital was to move. It costs much more to renovate a site than build a new one. Health Economics drives these mergers of local community type hospitals. Patients demand single rooms and hospitals need to offer all the new and specialized services. The hospital can survive because of the new site. No one would offer to buy the hospital if it had remained in place. You would have a shuttered hospital today and be going to New Brunswick or Capitol Hospital ( also a new hospital) off of rt95.

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