Quality over quantity: Why Valley Health has no interest in merging

At a time when hospital mergers dominate headlines — and consolidation is often portrayed as inevitable — Valley Health is deliberately moving in the opposite direction.

That decision, CEO Dr. Robert Brenner said, isn’t about pride or isolation. It’s about efficiency, cost, community relevance — and a firm belief that bigger does not necessarily mean better in health care.

“The fact of the matter is, what causes mergers usually isn’t improvement in care or efficiency,” Brenner said. “Sometimes, it actually increases chaos and inefficiencies. It hasn’t been shown to improve quality. What really causes mergers and acquisitions is cash.”

For Valley, cash flow is not the problem driving strategy — and that distinction matters, Brenner said.

Brenner, in a recent sit down with BINJE, broke down merger-mania in the industry. Here’s how he sees it.

Across the country, hospitals have increasingly turned to mergers as financial lifelines, he said. Rising labor costs, uneven reimbursement, capital demands and aging facilities have pushed smaller systems to seek larger partners.

Brenner does not dispute those pressures. He argues, however, that mergers are often reactive, rather than strategic.

“If you don’t have the cash to keep investing in your facilities and operations, then eventually you’re forced to merge,” he said.

Valley has worked deliberately to avoid that scenario, Brenner said.

“We are very frugal about what we do,” he said. “We have a margin-enhancement program — it’s not about cutting. It’s about doing things efficiently and making sure investments are well thought out.”

That discipline, he said, prevents the cascade that often leads to consolidation: unchecked spending, shrinking margins and, ultimately, the loss of independence.

It also has helped The Valley Hospital be consistently ranked by U.S. News as one of the top hospitals in New Jersey and the New York City metropolitan area.

Brenner admits there is one part of merging that makes sense. Larger health systems have better negotiating power and often secure higher reimbursement rates from insurers.

But Brenner questions the benefit of that dynamic — particularly for patients.

“When you’re bigger, you have higher negotiating power,” he said. “So, you negotiate higher rates. And what does that do to the cost of care? It increases it.”

He also pointed to a broader consequence of consolidation: the creation of exclusionary networks. As neighboring systems merge, standalone hospitals can be shut out of preferred insurance arrangements — leading to financial pressure that ultimately forces them to merge as well.

“You end up propagating the problem,” Brenner said. “Eventually, someone gets squeezed and has no choice.”

Valley, he said, has chosen a different path.

Instead of merging, Valley invested in capacity, efficiency and long-term relevance.

In April 2024, Valley opened its new 370-bed hospital in Paramus, a project designed to meet demand without relying on a “mothership” of dozens of hospitals. The facility doubled emergency-department capacity, expanded and modernized operating rooms, and dramatically improved infrastructure — from elevators to energy efficiency — while remaining community-based.

The system also has expanded strategically in ambulatory care, including last fall’s opening of a 60,000-square-foot facility in Montvale, rather than chasing scale for scale’s sake.

“We’ve built what we need to serve our community,” Brenner said. “And we’ve done it thoughtfully.”

Asked whether further expansion is possible given rising volume, Brenner was measured.

“These are things we’re evaluating right now,” he said. “But it’s under evaluation. No decision has been made.”

What is clear, Brenner said, is that remaining independent places a premium on community relationships — and accountability.

“We have a lot of loyalty in the community,” he said. “We have a lot of loyalty among our employees. And we’re doing great without a mothership.

“To me, there’s no reason for Valley Health System to merge.”