NJ Spotlight

University Hospital president and CEO John Kastanis


The head of University Hospital in Newark will step down at the end of next week amid ongoing concerns about the quality of patient care, including a recent bacterial outbreak that may have contributed to the death of three premature infants.

Hospital representatives announced yesterday that president and CEO John Kastanis would leave his position at University Hospital on December 14 to return to his work as a healthcare and hospital consultant.

Kastanis, who was hired in 2016 and is paid $900,000 annually, signed a new three-year contract earlier this year, according to media reports. Hospital and state officials declined to say if he was offered a buyout or other financial package in return for his departure, or where funding for such a deal would originate.

Healthcare leaders thanked Kastanis for his service, but also welcomed the opportunity to establish a new leadership team at University Hospital, which is considered the state’s only true public hospital and is supported by state tax dollars.

“I wish Mr. Kastanis the best moving forward. New leadership at University Hospital will present an opportunity to turn the page culturally and set the hospital on a rapid improvement path,” said New Jersey Health Commissioner Dr. Shereef Elnahal.

Baraka: ‘Move in the right direction’

Sen. Joseph Vitale (D-Middlesex), chair of the health committee in the upper house, praised Kastanis’s commitment to the facility, but added, “I look forward to new a leader who will insist on excellence, quality and accountability within one of our state’s most important teaching hospitals and trauma centers.”

And Sen. Ron Rice (D-Essex), whose district includes part of Newark, said he has not been happy with the facility’s leadership and was concerned about Kastanis’s salary.

Newark Mayor Ras Baraka, who urged for Kastanis to be removed recently, called his departure “a move in the right direction for the hospital and the residents of the city,” adding that the hospital board also needs to better represent the community.

University Hospital includes one of the state’s three Level 1 Trauma Centers, a primary medical education facility, and serves as a critical source of emergency care, inpatient treatment and outpatient services for New Jersey’s largest urban area. It is slated to receive more than $100 million in state funds this year, including $46 million in charity care, more than any other facility in the state, to help cover the high number of uninsured patients, and $43 million for payroll support.

But the hospital has struggled to maintain high-quality care and financial stability. It received a failing grade from the nonprofit watchdog Leapfrog Group in March, which increased to a D in Leapfrog’s fall report. At the time, Elnahal attributed the clinical concerns to a lack of investment in management and staff, which led to poor morale and lesser patient outcomes.

Report from state monitor expected soon

In July, Gov. Phil Murphy required the health department to appoint a monitor to oversee the hospital’s operation and help craft a long-term plan for stability. Among other things, he cited the Leapfrog analysis, the board’s recent approval of a new, more lucrative contract for Kastanis, and a bond-rating downgrade of four notches by Fitch Ratings earlier that month.

Elnahal selected Judy Persichilli, a longtime hospital executive and quality expert, to review its work; a report on her findings is expected in the coming weeks.

Murphy declined to comment yesterday on Kastanis’s departure.

On October 1, the DOH was alerted to a bacterial outbreak that had infected several premature infants at the hospital’s Neonatal Intensive Care Unit, one of whom had died at another facility. The state provided guidance on infection prevention, but a follow-up visit revealed these protocols had not been universally adopted, sparking additional state oversight, concerns among lawmakers, and calls from Baraka to replace the hospital’s leadership team.

Infections with the Acinetobacter baumannii bacteria — which is not uncommon in hospitals and can cause serious harm to those with limited immune systems, including premature babies — have since been confirmed in four vulnerable babies at University Hospital, three of whom have died. (The outbreak is unrelated to the viral outbreak that has killed 11 medically vulnerable patients at the Wanaque Center for Nursing and Rehabilitation.)

Outgoing CEO ‘proud’ of his team

In the statement released yesterday, the hospital said Kastanis has recruited a new leadership team of “experienced professionals who will continue to focus on aggressively improving the quality of care provided and driving the financial health of the institution.”

Kastanis said these officials and other staff are aware of the “special role” they play in the region’s care.

“I am proud to have built a talented leadership team and to have continually challenged them to improve the quality of care provided here every single day,” he said. “Those of us in the building, regardless of position, know that we have started to see improvements that will benefit our community’s healthcare and position us for the future.”

Tanya Freeman, who chairs the hospital board, said the group would continue to work with these leaders to improve care. “We appreciate John’s service at University Hospital and wish him well as he begins this next chapter of his career,” she said.

Choosing a replacement for Kastanis is an important decision, said Vitale, the chair of the Senate health panel, adding that changes at University Hospital are needed to better serve the community. "Effective leadership is one of the essential ingredients in achieving and maintaining high quality care. It is important that top leaders set the highest standards and maintain them throughout the hospital,” he said. “A standard of excellence is required in the operations of all of New Jersey's hospitals."

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