Over the past decade, more than a dozen Jersey hospitals have closed because of financial troubles - but now there's a new problem on the horizon.

A growing number of Garden state hospitals are merging and forming partnerships - because of pending changes in how hospitals will be reimbursed for Medicaid and other federal programs.

Kerry McKean Kelly, the Vice President of Communications for the New Jersey Hospital Associations says "right now we're seeing a flurry of merger activity in recent weeks…what we're seeing is the lingering impacts of what has been a harsh marketplace in New Jersey healthcare for many years…coupled with the looming changes under healthcare reform that will change how hospitals are paid under the Federal Medicare program and other Federal programs."

She says between those two factors "it's creating a lot of activity - some uncertainty and some angling on ways that hospitals can be best positioned to meet the challenges of the future…you want hospitals to be working in lock-step with the physicians and with the nursing homes and with the home health agencies to make sure they're all on the same page, working together to make health care more efficient, and one of the ways they're going to do that is coming down the road, Medicare is going to move to what's called a bundled payment - and that means there will be a single payment for an episode of care - and that will then have to be divided up amongst everyone who took care of that patient."

She point out "it will have to be divided among the physicians, among the hospitals, among the nursing homes and obviously it's going to be easier to do that if you're all working together within the same organization…this is new and different, so that of course raises some questions and concerns…but I think everyone does agree that the current healthcare reimbursement system is broken and is not sustainable for the future…so the idea is let's find a way to improve healthcare quality while reducing costs."

Kelly adds "everyone wants the comfort of having a hospital presence in their community, and quite frankly the way the industry has been the last several years, that has been jeopardized in some areas - so while some people might be wary of some of the changes they're seeing, the ultimate goal for many of these towns is to preserve access to hospital care right there in their community…when a hospital merges with another system, it can bring several benefits including better, greater access to capital…a merger can also give expanded access to new programs and services."