Bacharach is looking to the future after announcing the Select Medical acquisition

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GALLOWAY TOWNSHIP – Pressures affecting small health care providers nationwide are ending an era of rehabilitative care in the region.

Bacharach Rehabilitation Institute agreed in September that Select Medical would acquire its licensed beds, with which Select would build a new rehabilitation hospital operating under Bacharach’s name. AtlantiCare is set to acquire the Bacharach facility located next door to the campus hospital as part of the deal.

The deals are awaiting approval from various state agencies.

Richard Catharines, Bacharach’s chief policy officer, said the deal will create a more sustainable future for rehabilitative healthcare in the region.

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

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A Select spokesperson said more details about the new rehab hospital are not available, as it is still receiving approval from government regulators. The new facility will provide treatment for various ailments, including brain injuries, cancer, spinal cord injuries, and strokes.

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

Catharines said Bacharach has faced financial difficulties over the past several years. The company has struggled with the high regulatory and technology health care costs that generally face all hospitals, Catharines said, something that can be particularly challenging for a smaller hospital. There have also been changes in the rate of patient referrals due to managed care plans and admissions as well as the difficulties brought about by the COVID-19 pandemic.

“These problems combined to create a financial picture that was difficult for us to overcome,” said Kathryns.

Bacharach has a rich legacy in the region. Founded in 1924 in Longport, it operates as a facility providing rehabilitative care to pediatric patients. He quickly established a national reputation for specific treatments for children, regularly attracting children and families from Philadelphia in search of healing and restorative salt air on the Jersey Shore.

“It all came together and became part of the Atlantic City Foundation,” Catharines said. “It has become part of the environment.”

Bacharach moved to its current location in Galloway in 1972, three years before the opening of what is now the main campus of AtlantiCare Regional Medical Center. Soon after, the institute moved away from caring for children and became a rehabilitation hospital for adults, eventually earning its designation as a specialist hospital from the state. It remains an adult rehabilitation hospital, offering a range of inpatient programs, including those that treat brain and spinal cord injuries, strokes, and neurological and orthopedic disorders. She also continues to provide childcare.

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

“Patients who we think are a good fit under Medicare guidelines, someone else at the insurance company thinks they’re not a good fit,” Catharines said.

Catharines said he was encouraged that government officials had begun to notice the hurdles that some managed care plans put in place for institutions like Bacharach.

“The goal there is to reduce costs, so they may not want to send a patient to a higher-quality rehabilitation hospital instead of a less expensive[facility],” Catharines said. “There’s a lot of research in terms of outcome value (in rehabilitation hospitals) versus outcomes in nursing homes and so forth.”

The pandemic has exacerbated these financial challenges. Public health closures imposed in 2020 have reduced admissions to rehab facilities like Bacharach, slashing revenue for the facility.

Bacharach was vulnerable to these financial challenges, Catharines said, because of its status as a small, non-affiliated, non-profit hospital.

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“If you were to look around the South Jersey, NJ, country, you would see that the number of small, stand-alone hospitals is dwindling,” Catharines said.

The acquisition of Bacharach’s licensed beds comes as smaller hospitals in the region are being absorbed by their larger counterparts. The Cape Regional Health System, which operates the only hospital in Cape May County, entered into a merger agreement with Cooper Healthcare University of Camden in December.

“I think there is a growing trend towards standardization,” said Catharines. “It’s hard to argue against it.”

Catharines said Bacharach was optimistic that the chosen medical acquisition could help improve health care outcomes in the region. He noted that Select Medical operates the Kessler Rehabilitation Institute, which U.S. News & World Report ranked as the fourth-best rehabilitation hospital in the nation. Bacharach’s healthcare providers had previously collaborated with doctors from Select Hospitals and were impressed with their 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’ve come to know their clinical acumen and their commitment to the community,” said Kathryns.

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Catharines said the new Select facility will continue to operate very little with Bacharach and generally none of Bacharach’s employees will be transferred to the new Select facility. There will be a gap between the time the Bacharach facility closes and the new rehabilitation hospital opens.

An AtlantiCare spokesperson said in an email Monday that the company has not yet decided for what purpose the Bacharach facility will be used. It will not be used as an acute rehabilitation facility as no such services are offered at AtlantiCare, although referrals will be made to appropriate providers. The health care company did not have a timeline as to when to start using the facility in light of the pending government regulatory approvals. Bacharach’s name will not be retained in the operation of AtlantiCare.

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

It’s not the end of Bacharach as an Atlantic City-area institution. The Bacharach Hospital Foundation will continue to operate after the closure of the Bacharach Rehabilitation Institute. Catharines said the foundation could support health care on several fronts, perhaps supporting research, establishing scholarships, assisting other clinical programs, or partnering with local colleges. Catharines said the foundation is still exploring its options.

Catharines acknowledged that the acquisition would be difficult for people who were attached to Bacharach’s company, as well as Bacharach’s current employees, some of whom had worked at the hospital for decades. However, he expressed optimism that the deal would ultimately benefit the population Bacharach had served for so long.

“It’s a sad time, but I think this is in the long run, a good opportunity for the community, for sustainability and growth,” said Catharines. “I think in the end, it’s a win-win, even if it seems painful now, it feels sad.”

Contact Chris Doyle

cdoyle@pressofac.com

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