The art of the deal: How Hackensack Meridian Health CEO Robert C. Garrett approaches M&A

- DEPOSIT PHOTOS

By: Martin Daks / editorial@njbiz.com

Robert C. Garrett knows how to make a deal. As president and CEO of the Hackensack University Health Network from November 2009 through July 2016, he expanded the network through a series of acquisitions, partnerships and affiliations. Then in July 2016, he engineered a combination with Me-ridian Health to create Hackensack Meridian Health (HMH).

During his tenure, the 17-hospital organization – which bills itself as “the state’s largest network” with some 34,000 employees and 500 patient care locations – is still growing.  In 2018, HMH merged with JFK Health, and at the beginning of this year it merged with Carrier Clinic. In July 2019, HMH acquired three nursing home facilities - Prospect Heights Care Center and Regent Care Center in Hackensack, and West Caldwell Care Center. Currently, Garrett said, “we are in active conversations with seven health care organizations in New Jersey,” which have progressed far enough to justify signed non-disclosure agreements.

Growth with a purpose

But growth is about a lot more than just about bragging rights, Garrett insists. “We are not interested in growing just to get bigger,” he said. “Our growth is always strategic and is pursued with a variety of exceptional partners to accomplish this goal: We want to continue providing outstanding care, the best patient experience possible and the best out-comes, or what we call the ‘Triple Aim.’”

Garrett

It’s on ongoing process, with Garrett and his team “constantly scanning” for new opportunities “to enhance care and the patient experience and to improve outcomes,” he added. “We assess where we are today and where we want to be in a year, next year and beyond.”

Sometimes a transaction makes sense because of the location. The JFK deal, for example, “allowed us to fill in the gaps in our network in Central New Jersey with high quality, convenient care and added services including rehab and advanced neurosciences.”

To assess these and other opportunities, Garrett works closely with James Blazar, HMH’s chief strategy officer, and others. In addition to hard numbers and other issues, they examine soft information like “quality, culture and geography,” he said. “Most important is sharing a common commitment to delivering care that is high quality and provides value. Once plans reach a certain level of detail and engagement, we get the board involved.  What’s important here is that we never take a one-size-fits all approach.”

When the fit’s right, it could lead to a deal. But Garrett and his crew don’t limit their thinking to a single dimension. “We are not always looking for a merger or acquisition,” he said. “We believe in taking a much broader approach in partnerships. They come in many forms: a strategic clinical affiliation, a full acquisition, and many points in between including joint ventures and joint operating companies.”

As an example, he pointed to the December 2016 partnership with Memorial Sloan Kettering Cancer Center “to create a uniform standard of care and to expand outpatient options by building a joint venture facility in central New Jersey next year. We also partnered with the New Jersey Institute of Technology [in 2017] to bring forth the next breakthroughs in care delivery.”

Aimed at bringing together experts in science, health care and technology to improve care delivery, the NJIT partnership leverages a $25 million in-vestment fund. It’s already invested in Pillo, a home health robot that automatically dispenses medication, and PurpleSun, which utilizes ultraviolet light technology to reduce the risk of hospital-acquired infections, Garrett noted.

Daring to be different

HMH also broke new ground with the Carrier Clinic merger, which was announced in January and billed as “a rare partnership in the U.S. of a be-havioral health provider and a multi-hospital network.”

Carrier Clinic - HACKENSACK MERIDIAN HEALTH

The deal “is a classic example of how we assessed our goals and went on a mission to find the best partner possible to achieve them,” Garrett said. “We were eager to transform behavioral health care in New Jersey because a record number of people were dying of opioid overdoses and so many patients with mental illness were receiving episodic care, rather than coordinated, high quality care that is essential to improving outcomes. Our goals were very clear: we wanted to expand access to treatment, better coordinate care and innovate treatment.”

With the Carrier Clinic deal in the rearview mirror, “We are on schedule to open our first urgent care behavioral health center in just a few weeks,” he added, noting that plans to create a “destination, comprehensive addiction treatment center,” to be known as The Retreat at Ramapo Valley, are on track too.

“We expect to open later this year,” Garrett noted. “When we are fully operational in 2020, we will have 85 beds, and extensive outpatient services all located on a healing 40-acre campus in Mahwah.”
Whenever a CEO engages in M&A or other significant activity, he or she is, to some degree, putting their own reputation on the line. If the strate-gies succeed, the board of directors will pat them on the back – if not, they may be out on the street. Some CEOs respond by playing it safe and maintaining the status quo. But not Garrett.

The way he sees it, “[m]y role as a CEO is to make decisions based on the best information I have at the time, guided by exceptional leaders who are committed to our mission. Opportunities are challenging and exhilarating. To succeed, you have to put yourself on the line and know which idea – out of so many competing possibilities – is worth pursuing.”

His own philosophy can be summed up by a quote from Apple co-founder Steve Jobs that’s displayed outside of Garrett’s office: “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the 100 other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things.”

Saying “no” as well as “yes” helped Jobs to transform an industry and shake up the economy. It seems to be working for Garrett, too.