BuildingNY: Barry H. Ostrowsky: Barnabas Health

♪♪[THEME MUSIC]♪♪ STOLER: You know I want to, I want to be an urban planner, I want, I want, I want to play, I want to be a track and field you know I want to play football, you know maybe I’ll go out to Tennessee to law school, then I’ll practice law and all of a sudden I became CEO and President of the second largest employer in the state of New Jersey, the biggest health care system, I’m lucky to have Barry Ostrowsky, thanks for being here today OSTROWSKY: It’s pretty impressive, I thank you I’m delighted to be here STOLER: So tell me about your parents where they came from you know I remember there was Russian OSTROWSKY: I had great parents, I’m sad that my father’s gone now thirty years, but mother’s still here she’s almost 91 My mother was born in Czechoslovakia came here as a seven year old, her father having come before her to set up household So she and her mother came over, eventually there were two other siblings and they lived in Newark STOLER: So how did they end up in Newark? OSTROWSKY: Our family from Czechoslovakia and Hungary had migrated to Brooklyn originally and then a part of it broke off and went to Newark where one of my relatives opened up a dental lab, which became a very successful business and he helped bring everybody else to New Jersey STOLER: So he was the patriarch OSTROWSKY: He was the patriarch, precisely right STOLER: Let’s talk about your dad’s side OSTROWSKY: So my father’s family was from Russia came over, they were born there but my father’s father, my grandfather who I never got to meet and he had him for only eight years died when my father was a little boy and so my father grew up with his mother a single parent in Newark and it’s for some point in Camden and then back to Newark, where he made friends with all the people that I grew up with as aunt’s and uncle’s STOLER: Now did you check with mom who’s 90 years of age, who happens to be in charge of a surgical volunteer at a hospital how she met your father? OSTROWSKY: Well it was a blind date and her best friend, my father’s best friend were going out together and before you know it there was a blind date and shortly thereafter they became a couple They had never known each other although they were in Newark all those years, the community in Newark was vast at the time and you had your own group This was an intergroup marriage within the same community and it worked STOLER: How’d your father get into the paint business because there was one relative who was in the real estate business before the depression I think OSTROWSKY: Yeah, unfortunately his father, his father was in the real estate business the depression wiped him out and unfortunately he along with it My father had a dear friend whose family was in the paint store business There were two paint stores and so after my father came out of service he and his friend each went into the paint business

STOLER: That one was in? OSTROWSKY: Irvington, New Jersey and our store was in Mount Claire, New Jersey STOLER: Now this was Red’s? OSTROWSKY: Red Star Paints STOLER: Red Star Paint Supply which was the beginning of your entrepreneurial OSTROWSKY: We all worked there, we all worked there growing up and the lowest rung on the ladder was to take jugs and wash them out and then fill them with turpentine That’s how you knew you were in the paint business in our family and you started that way and that was it STOLER: But at least two of you were doing that portion of the paint, you weren’t the schmearer OSTROWSKY: No I wasn’t the schmearer, absolutely not STOLER: But you were just supplying the paint But it was it was a good, good growing up situation OSTROWSKY: You know it’s funny I’m in health care now, health care is now needs to get into the retail business and you know better than anybody because of your background and commitment to health care in New York We don’t know how to be in the retail business in the health care field I grew up in the retail business and the things I learned when I was a little boy are transferable and need to be to health care STOLER: It relates to one of my past guests who was a health care expert and her (IND) in New York Presbyterian, and her work in Lakewood Her father owned a hotel and basically dealing with customers and is the way and that’s health care today, it’s a consumer business you know especially with the changes which we’ll talk about in a little while So you were living in Newark and then what happened there was the move to the suburbs OSTROWSKY: Yeah interestingly, I was eleven years old we moved out to Millburn, New Jersey, which was the suburbs STOLER: We have a couple of pictures of you as a kid, you know with your siblings and then we have the bar mitzvah pictures OSTROWSKY: That took place in Millburn STOLER: When you were growing up, how did you get involved with track and field and football? OSTROWSKY: Well I was I love sports and football is something I wanted to play it was more or less a cultural rule that Jewish boys didn’t play football, certainly in Millburn, New Jersey that was the case and it took a long time and a lot of persuasive discussion to have my mother sign the card and so I played in high school both football and track Something I was delighted to try to play in college, I got hurt playing football in college but I spent my college career on the track team STOLER: So let’s talk now you graduate Millburn High School and how did you decide to go to Rutgers? OSTROWSKY: Well embarrassingly I looked at most schools through the athletic department, at the time Rutgers was trying to rebuild its football program, a long, long time ago and I was persuaded to go to Rutgers as opposed to some other schools that had interested me for football and I went there STOLER: Which is very interesting because something that’s happening today in New Brunswick So you know as they would say certain things go in the timeline of your life you never realize that, you know especially, you know with the institution having Beth Israel in Newark, now maybe Robert Johnson Wood in New Brunswick, but you’ve been involved in these on the periphery So when you went to Rutgers and you were on football and then you were in track at that time you said you were interested in urban planning, how’d you get involved with urban planning? OSTROWSKY: I’m not even sure I can explain that except that when you sit down and try to pick a major you think about all the creative things you could do, and urban planning was at the time something that was just developing So I chose to adopt that curriculum at Rutgers and I spent a lot of time on it, I travelled and studied urban planning techniques in other cities and I was committed to come out of Rutgers, go to law school and spend my career merging law and urban planning STOLER: I know that your mother’s brother was the attorney, the member of the family who went to college you know was the professional When did you think when you were growing up that you wanted to be an attorney, was it when you were a young kid in public school or high school? OSTROWSKY: Very young because in our family Uncle Bernie was the role model he was the man who had gone to college, became a lawyer and that’s what you needed to be, you needed to be like Uncle Bernie And so Uncle Bernie was a lawyer there really wasn’t much choice, had I wanted to be a doctor they would have accepted that But I didn’t have that inclination STOLER: It was in the DNA, the DNA, you could be in that, either way Now Uncle Bernie had relocated right? OSTROWSKY: Yeah he was, he had gone to University of Pennsylvania’s, he was going to law school here in New York, at N.Y.U as a matter of fact when he met a girl who came from Knoxville, Tennessee and finished up his law school in Knoxville and had a thriving law practice in Knoxville, Tennessee So that when I got out of undergraduate school he said to me look you’re going to spend the rest of your life in the northeast why don’t you try another part of the country And since he was who he was in our family I went to Knoxville

and went to law school at the University of Tennessee STOLER: How was Knoxville? OSTROWSKY: Fabulous STOLER: I mean that here’s a guy who grows up in New Jersey, you go to public school, you go to high school, you go to college and all of a sudden you’re in the south OSTROWSKY: Well I thought it was terrific Knoxville is a university town so it has all the attributes of that, very cosmopolitan for a small city had its own symphony, it was strategically located a couple of hours away from Atlanta So if you needed some dose of urban you could get to Atlanta The Jewish community in Knoxville was terrific, very supportive of themselves and very cultured So we loved it, I say we because in between my second and third year law school I got married STOLER: So let’s talk about your first year because you came back during the summer to OSTROWSKY: To be a law clerk at the firm that I eventually joined STOLER: So how’d you get originally to Brach Eichler? OSTROWSKY: well one another member of our family is Eichler So when I was younger while I was in college STOLER: Now Eichler is? OSTROWSKY: On my mother’s side STOLER: Your mother’s side OSTROWSKY: And I was an office boy at this firm I was an office boy, an associate, a partner, a managing partner without ever leaving this particular firm but I was an office boy there and I came back after my first year law school and became a law clerk When one of, one of the young associates decided to introduce me on a blind date to the great lady to which, to whom I’m married now STOLER: Right and we have a picture of your in-laws OSTROWSKY: Fabulous people STOLER: So your wife was a schoolteacher? OSTROWSKY: Schoolteacher STOLER: Okay, did she move out with you to Knoxville? OSTROWSKY: Yeah for my third year law school she came down and taught school in Knoxville and to this day we say frankly had we not had our parents back in New Jersey we may well have stayed in Knoxville, but we weren’t about to give up that proximity and closeness STOLER: So when did you give up working at the paint store OSTROWSKY: I have to tell you this My father died in 1985 I was already a significant partner in my law firm, but a delivery had to be made and I took out a delivery so I don’t know that I ever got out of the paint business officially but and I worked there, when I was in college my dad had had a heart attack so I was at Rutgers and around practices and classes I would go up to Mount Claire and I would work in a paint store and it was a family commitment It was what we ate, drank, slept, paint business STOLER: You joined Brach Eichler in what year? OSTROWSKY: Well I got out a law school in ’75 and so I was an associate in August of ’75 STOLER: Now you were in the litigation department? OSTROWSKY: Well I went there presumably to do urban planning at that moment, I started on a big piece a litigation about development in a part of New Jersey and I spent the first four months on this piece of litigation and then someone came to the firm and said I want to build a dialysis center STOLER: Now I don’t understand dialysis and paint, I understand you know sometimes you mix paints and other things OSTROWSKY: Thankfully there is no connection there STOLER: Now listening to your background you didn’t have any inkling of the health care, none of your relatives and nothing over there OSTROWSKY: Correct STOLER: And even Brock Eichler wasn’t OSTROWSKY: We are just beginning this, we began a health care practice So it was at a time in health care when institutions needed some specialty legal work, not the old time lawyer STOLER: Right and this was even before really the preponderance of the H.M.O.’s because that took places like an ’85 OSTROWSKY: That’s right well before that STOLER: Okay you were ’75 and this was the one with the certificate of need? OSTROWSKY: Certificate of need New Jersey had rate regulation, so we had to we had to argue and advocate for our clients who needed rate relief from the state of New Jersey So the whole regulatory regimen had changed and the typical hospital lawyer you know many of them had not stayed in touch with these new regulatory STOLER: Right and at that time I mean hospitals were single institutions, it was, there was no large system with you know with nursing homes, with hospice’s, with ambulatory It was a different type of business and getting to the Barnabas system the Barnabas system was in Newark originally and they relocated in 1965 or ’66 and you know so they were over there So you’re working on this case how do you become more of a specialist in the health care business OSTROWSKY: It typically takes one case, so on dialysis I had to learn everything about certificate of need, federal regulatory activity, building a health care facility and various codes and you know word of mouth So this guy knows health care law so the next thing you know you start to build the practice and it was a very important practice, it became a significant one and it was through this practice that I met my health care mentor, much like my uncle is my legal mentor STOLER: So how’d you meet Ron?

OSTROWSKY: So Ron Del Maro, my predecessor and mentor was on the board of an H.M.O., you just mentioned H.M.O.’s, I was representing an H.M.O of which he was a board member Crossroads, it was an Essex County H.M.O that had been begun by the Medical Society of Essex County and the Hospital Association of Essex County He was on the board, I represented it, we became friends through that friendship ultimately we became business partners STOLER: But let’s talk about that so you joined Brock Eichler in ’75 OSTROWSKY: Correct STOLER: You progress, you become a partner, you become a senior partner, managing partner and Ron all the time, because one of your biggest clients happened to be the Barnabas hospital Wasn’t a system at that time, it was one hospital and we have a check over here that you signed that you made out to Ron’s wife Peggy OSTROWSKY: That’s right STOLER: And it’s in 1985, so this is like ten years later What happened? OSTROWSKY: In 1985 Ron who had started at St Barnabas in the personnel department on a part time basis in the 60’s was made president of the institution and when he was made President he wanted me to leave the practice of law and help him run the hospital I told him no and he put up a fight and I took a check out of my wallet as you say and I made it out to Peggy Del Mauro dated April 30th, 1985, I signed it, I said if I don’t, if I go to work for any other hospital except yours tell Peggy to fill in a number and buy whatever she wants STOLER: You know it’s a big difference you know, running, running a law practice and running a health care system How do you decide it was five years later how’d you make the decision that you felt it was about time to leave dealing with all the clients to really work with one entity over there OSTROWSKY: You may appreciate this more than anyone I was a lawyer and all my clients were my legal clients but I gave business advice and I maybe could be disbarred for saying that now but the truth was I sat down hospital C.E.O.’s and we talk strategy and finance and so I always liked the idea of managing a business I grew up in a business environment where it was small enough to actually manage it if you wanted to do it and so it wasn’t the pursuit of justice in the law for health care that I was after, I wanted to help these institutions and physicians be more successful within health care STOLER: Right and you were, I mean as we were saying before the 80’s with the turbulent times you know, with the HMO’s You know we had United Health Care, we had you know and not, it was US healthcare OSTROWSKY: HMO Pennsylvania when we started STOLER: Right, you know Lenny Abramson over there and you know there were questions and people they were, they were accustomed to major medical and now you are over here and you had to go to this doctor and people didn’t know and then there were D.R.G.’s, Diagnostic- OSTROWSKY: We invented them in New Jersey STOLER: Right, New jersey was the state over there, and then, so what happens, you’re having dinner one night with Ron? OSTROWSKY: Well Ron and I spent a lot of time together because St. Barnabas needed an awful lot of work We were out lots of nights convincing physicians to move their practices to Barnabas And one night in November of 1990 we sat down at one of our favorite restaurants and Ron announced to the waiter who always brought us our drinks that there be no such thing until I agreed to come to work for hm I said Ron this is an ambush STOLER: Now was the check with him? OSTROWSKY: He didn’t show me the check at the time and Ron said look you have to do this now, we’re going to, I want to grow, so sure enough we negotiated a deal literally at the dinner table And I agreed to come to work in April 1991, so it was like a six month notice for me to extricate myself from the practice STOLER: Now you join, you join as a senior vice president and general counsel? OSTROWSKY: Correct, it was primarily it was for business purposes and I was a lawyer so I took the general counsel but it was that first day of work when I showed up on April first I got to my office and on the desk was this check I had made out to Peggy Del Mauro they kept it those many years and of course now I have it and I, It’s what I showed you today STOLER: So when you join the Barnabas Health, it was Barnabas Hospital? OSTROWSKY: It was St Barnabas Medical Center STOLER: St. Barnabas Medical Center, it was about 350 beds OSTROWSKY: No it was bigger than that, it was about 550 beds but it was one hospital STOLER: Talk to me about the growth you know over the last you’ve been there, it’s 24 years this year OSTROWSKY: Unbelievable STOLER: (IND) over there Let’s talk about the growth OSTROWSKY: So you’ll appreciate this because you just said it, we’re one hospital and back then there was a lot of talk about changing the reimbursement system so that you would have to live on something like capitated payments and you needed a full network of hospitals and physicians

if you’re going to succeed So Ron and I decided we’d go out and we would start to accumulate and build the system So we basically went to a number of my former clients We want to the union hospital first because it had a small hospital, four nursing homes, two outpatient centers, a behavioral health system, so we brought that into the system, merged it with our hospital just to understand what would it be like to have a network of a variety of health care services And from there we started to launch the acquisitions of other hospitals and other facilities All based on the fact that there was going to be a change in the reimbursement system, which frankly never occurred When we initiated that it instigated other systems in New Jersey that did the same thing so you had a number of systems taking hospitals that had otherwise been independent and now created networks and organizations Ours was the biggest by employment, by activity, by a number of facilities it ebbed and flowed We had X number, we closed a couple, we sold a couple but it’s remained a big system, ironically built for the first threat of a major change in health care reimbursement which is happening now many years later just didn’t happen that- STOLER: Right, but how is Obamacare and the current changes change the nature of the Barnabas health system and the operations over there OSTROWSKY: I think the major principle that that health care reform out of Washington is trying to, I think trying to protect is this notion that you need to get value for the money that’s paid and in order to do that organizations have to be big enough to get the economies of scale and have to be widespread enough to cover a large populations And so having a big system is consistent with the health reform Now health reform is in fact reducing certain reimbursement and trying to insist on better quality and healthier lifestyles STOLER: Right and that’s something that you’ve spoken about in numerous appearances on T.V and in articles about, the focus is to keep people healthy and if you’re healthy you won’t be in the hospital one, there will be less treatment and then there’s the ACO concept that you get paid a higher reimbursement from the federal government right? OSTROWSKY: Well at least you get, you get paid a reimbursement that you can allocate to more appropriate uses than the way the fee for service system works But as you just said our mission in health care has changed, our system and I believe others, our mission is now keep people healthy So help, population health management is not about sickness it’s about keeping people healthy If you can keep enough people healthy you’ll have more than enough resources to treat those who get sick, you know people aren’t going to be healthy a hundred percent So this is the way we’ve changed our business, we want to integrate with our communities and we want to make sure we do things to invest in their health as opposed to their sickness Our system for us has become a great platform to do that Tough to do that as a single hospital, you need to have facilities, you need to have geographic coverage STOLER: But health care you know when you when you started in ’91, you know the average stay at the hospital was probably six to seven days at least And today if somebody is in the hospital and that’s what I’d preface, if they were in a hospital because of the ambulatory surgery and everything there, I’d say it’s an average of three and a half to four days, tops over there And then as we were saying you know today it’s more ambulatory care, it’s more of a real estate business, it’s more of a retail business and even certain major innovations that you’re doing with regard to insurance companies, this year you’re planning to implement your own insurance OSTROWSKY: Well we’re going to announce a very special arrangement with Horizon Blue Cross which will allow us to take premium dollars and allocate them in a way that it does that is designed to keep people healthy not necessarily wait till they’re sick But what all that you’ve just said of course is a brand new mission for an organization like ours When you are a hospital and all you were is a hospital you needed people to be in there buying your product called overnight stays, the technology thank God and the health care improvement means you don’t have to be in the hospital overnight but if the only product you have to sell is an overnight stay you’re not going to be in business very long So here diversifying away from inpatient is consistent with how to treat people better and be successful STOLER: Now, in the interim of this how did you end up with one day at the Yankee baseball training camp,

I mean you’re running, you’re running an institution OSTROWSKY: Well that was my real aspiration if I could have played for the Yankees life would have been different STOLER: Did you get the baseball card? OSTROWSKY: I got baseball cards and yeah so for a big birthday of mine many years ago my wife gave me a present go to Yankee fantasy camp and I got to hang around with Mickey, the blessed memory he was still around at the time and all the other old timers And you know it’s one of those fantasies that it’s great to live out STOLER: And then what is this with the excavation OSTROWSKY: So in addition to wanting to have been a Yankee, I always had this idea that it would be fun to drive construction equipment so many years later, it was only a few years ago my wife found an organization in Colorado where you can go spend the day learning how to run an excavator and a bulldozer So we flew out to Colorado and I have pictures of that with my hard hat and my lunchbox and I’ll tell you that was a lot of fun, a lot of fun And maybe someday I’ll be able to get back to doing that STOLER: I think it’s one of the principles of the Barnabas system that you and Ron and over the years is a very people oriented first name approach and everything else And also you’ve recently got a very involved with the Special Olympics OSTROWSKY: Yeah, first of all the extent to which I’m in a corner office, I’m in a corner office, but I’m a G.I general, it is a first name basis and I want it to be like that and we have a great cast, we have great colleagues so that’s terrific Mission to us is helping people, you know organizations of a certain size sponsor things, billboards in ballparks, all of which we do I wanted us to make a commitment to a group of people who we thought was underserved which is the intellectually disabled and at the same time show people that this was our mission So the Special Olympics came to New Jersey last year, the national games and we were the founding health care partner and we were able to sponsor the event with other sponsors We had twelve hundred of our employees sign up as volunteers day one and I keep saying this to people I’ve never seen anything galvanize our employees like this commitment to the Special Olympics So for eight days it was terrific But I’ll tell you what’s even better, out of that commitment we have changed the way we treat and welcome those with intellectual disabilities into our health care system, who need health care services So it turned out to be great name recognition, terrific It turned out to be a mission consistent support of something and it turned out to teach us how to better treat those with intellectual disabilities And I know you’re an interest in health care and medical schools we are going to the medical schools in New Jersey and offering to sit down and talk about how to include in their curriculum the kind of training you need for intellectually disabled people so to me it proved that you could latch on to something, not just you know having a blimp or doing whatever you do for notoriety you can pick certain commitments and hit a grand slam and we did STOLER: Family you’ve been married for what OSTROWSKY: It will be 41 years this July, July 4th I have two children, well our daughter got married a couple of years ago and our son is still looking for the perfect woman He lives in the city and our daughter and son all live in the city as well STOLER: And no grandchildren OSTROWSKY: Not yet but soon we hope STOLER: And momma as we were saying in the hospital working over there she’s independent living OSTROWSKY: That’s right, she’s 91 years old she just got a new car in January STOLER: Hey it’s great and you know it’s good that the kid who grew up in Newark and kept his roots in Newark and Livingston, Short Hills and soon hopefully with you know the Middlesex merger OSTROWSKY: Yeah, that’d be a great thing STOLER: Thanks for being here tonight OSTROWSKY: My pleasure, thank you so much ♪♪[THEME MUSIC]♪♪