‘Providers are part of the issue too’: Hackensack Meridian CEO outlines affordability strategy

Robert Garrett had a warning for the room before he said it.

“This may not be popular,” the Hackensack Meridian Health CEO told a crowd of fellow health system executives when speaking about healthcare affordability at Becker’s 16th Annual Meeting in Chicago.

“But providers are part of the issue too,” he said. “We need to own part of the problem, and we need to be part of the solution.”

The comment captures something deliberate about Mr. Garrett’s posture on healthcare affordability — a preference for accountability over deflection and for action over a wait-and-see approach.

It’s a posture shaped by growing federal headwinds. HR-1 represents the largest proposed cut to federal safety-net spending since Medicare and Medicaid were created, with the Congressional Budget Office estimating a $911 billion reduction in federal Medicaid spending over 10 years and the loss of coverage for at least 10 million people when combined with the expiration of enhanced ACA subsidies. As New Jersey’s largest health system, Edison-based Hackensack Meridian serves nearly two-thirds of New Jersey residents, including roughly 20% of all Medicaid patients in the state.

Americans’ healthcare affordability concerns are rising against this backdrop. A recent KFF survey found 66% of adults worried at the start of the year that they would not be able to afford care. A separate survey cited by Mr. Garrett found that 1 in 3 Americans are sacrificing food or gasoline purchases to pay for healthcare.

“I’ve heard colleagues talk about the fact that maybe with the midterm elections coming, maybe some of the HR-1 provisions will be repealed,” he said. “But I don’t really think that’s a strategy we should count on.”

Amid this reality, Mr. Garrett outlined three main levers to help bend the cost curve:1. Convene stakeholders to identify solutions together. Mr. Garrett has proposed a New Jersey healthcare affordability summit that brings every major stakeholder into one room: providers, payers, pharmaceutical companies, device manufacturers, technology companies, regulators and legislators. The summit’s working agenda, he said, would focus on aligning incentives around prevention, value-based care, technology investments and drug discovery that meaningfully lowers cost.

The governor’s office is “significantly considering” participating in or spearheading this effort, he said, with the goal of similar initiatives spreading nationally.

While the broader work gets organized, Hackensack Meridian is extending its own affordability programs. Its compassionate care program discounts care by up to 50% for patients at up to 600% of the federal poverty level — in New Jersey, roughly $200,000 a year for a family of four — targeting middle-income patients who don’t qualify for charity care or Medicaid but can’t comfortably afford commercial coverage.

“There are people that can’t afford commercial insurance, maybe because of employment status or other reasons, but they don’t qualify for Medicaid or charity care,” Mr. Garrett said. “That’s where compassionate care comes in.”

2. Modernize regulations. The piece of the affordability conversation Mr. Garrett said gets the least airtime is regulatory modernization.

Stark laws, written for the fee-for-service landscape of the 1970s and ’80s, now restrict hospitals from entering value-based arrangements with physician groups, while payers and private equity firms acquiring practices face no equivalent constraints, he said. Tort reform, largely absent from recent policy debate, also belongs back on the table, he argued. In states like New Jersey, high malpractice settlements have kept defensive medicine embedded in care delivery. Meanwhile, in Texas, where settlement caps exist, the market has stabilized.

State-level rules compound the problem closer to home. In New Jersey, certain cardiac procedures are required by regulation to be performed only at large academic medical centers, even where the American College of Cardiology supports a more flexible approach. The result is care delivered in the highest-cost setting available, not at a community hospital or outpatient site.

“The science is there, but the regulations haven’t kept up with the science,” Mr. Garrett said.

3. Shift care and build access. The third leg of the strategy is what Hackensack Meridian can execute without a summit or a new regulation: expanding access to convenient, cost-effective care.

Much of this strategy centers on moving care out of the hospital. The 18-hospital system has roughly 500,000 square feet of ambulatory space either under construction or recently online — physician offices, multispecialty practices, urgent care, surgery centers, comprehensive health and wellness centers.

Partnerships are extending the system’s reach further. The system has teamed up with Amazon’s One Medical to open more than 20 primary care clinics across the state. The effort targets a gap Mr. Garrett cited repeatedly: 1 in 3 New Jerseyans lacks access to a primary care facility. One Medical manages and staffs the clinics, which feed into Hackensack’s clinically integrated network, with patients referred to specialists for follow-up care. Hackensack initially set a target of 20 clinics over 10 years but is now moving faster and expanding that target, given the partnership’s early results.

A separate partnership with K Health powers HMH 24/7, an AI-guided virtual primary care network available around the clock. The system also works with Uber to close patients’ transportation gaps, and Clear to streamline the registration and admissions process.

On social determinants, Mr. Garrett made the math explicit: social factors account for up to 80% of health outcomes, which means no affordability strategy that ignores them will work. Through the Unite Us platform, Hackensack Meridian has screened more than 3 million people for unmet social needs and made more than 8 million referrals to social agencies, community health workers and other providers. Specific programs include medically tailored meals for discharged patients at risk of food insecurity, a Healthy Match grocery partnership that supplements SNAP dollars for fruit and vegetable purchases, and a newly funded state grant covering up to six months of rent for patients in unstable housing.

“You can’t ignore that if you’re going to change the health status of the communities,” he said.

Ultimately, Mr. Garrett described himself as “an optimist by nature,” though it’s an optimism that’s not void of realism.

“We could either lay low and hope it goes away, or we can get out in front of it,” he said of the healthcare challenges coming down the pipeline. “I’m in the camp of let’s get out in front of it as much as we can, because it’s not going away.”

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