Dr. Dustin Riccio’s answer to a shrinking hospital market is to get bigger.
“Health care is so uncertain and so challenging right now that if we are not growing, then we’re dying,” he said.
Riccio, CEO of St. Joseph’s Health since January 2024, is pushing the 167-year-old Paterson system to expand beyond the city that built it, while staying rooted in the mission that built it.
Riccio spoke on keynote panel, “Leading Without a Playbook,” at the SAX Symposium, held late last month at MetLife Stadium. Speaking alongside SAX CEO Joseph Damiano and Valley Bank Chairman and CEO Ira Robbins, Riccio told the audience of more than 500 that the market explains the urgency.
He said New Jersey, a state of about 9.5 million people, had approximately 125 hospitals 20 years ago. Today, it has 73 entities.
“And nearly over 50%, I think the number is 60-something percent, are consolidated into a larger system,” he said.
St. Joseph’s is one of the independents, and that’s why Riccio came.
“The reason I took this job was because I wanted to be a part of an independent health system and make it something special, more than it was today,” he said.
It’s already a big one. Riccio said St. Joseph’s is the largest employer in Passaic County and Paterson and the fifth-largest health system in the state, with 5,500 employees. It runs St. Joseph’s University Medical Center and St. Joseph’s Children’s Hospital in Paterson, St. Joseph’s Wayne Medical Center and a new 140,000-square-foot outpatient campus in Totowa.
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Growing has meant changing how a Catholic institution sees itself.
St. Joseph’s was founded by the Sisters of Charity of Saint Elizabeth, and Riccio said one of his biggest challenges has been sitting down with Sister Maureen Shaughnessy, the order’s General Superior, to explain why the system needs to grow beyond Paterson.
His pitch: St. Joseph’s isn’t just a safety net hospital anymore.
“We are not just a safety net organization; we are an anchor institution,” he said. “We can’t be as humble as we have been for the past 167 years. We need to change how people think about St. Joseph’s Health, and yet we need to be aligned on all those values of mission, charity, dignity, excellence and stewardship.”
That shift, he said, is what lets St. Joseph’s expand outside the walls of Paterson, into Wayne, Totowa and beyond.
Riccio said the goal is to put St. Joseph’s in “a position of relative strength,” so it can keep caring for the underserved in Paterson for generations and protect its identity in a market that keeps consolidating.
He’s realistic about that market. Asked whether consolidation will reach St. Joe’s, he said he hopes not, but that a smart system plans for every outcome.
“To be honest with you, I hope not,” he said. “But I do think that we need to run parallel paths for the future of positioning ourselves for strength while also evaluating what those possibilities are.”
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Riccio was clear: the mission comes first.
“We want to make sure that if it were to come to pass that we were consolidated, that we would be the same place that we were before,” he said. “That the Sisters of Charity and the charism that they gave to us actually lives on for another 167 years. But it only comes from a position of strength, and that is exactly what we are trying to do today.”
There’s one form of outside money Riccio isn’t sold on.
Damiano described a minority private equity deal that has fueled a dozen acquisitions at SAX, and Robbins praised the competition that private credit and private equity bring to banking. Riccio said health care is a different story.
“We have not figured that out yet,” he said. “The health care system remains disconnected at multiple levels, and I don’t know what private equity looks like in our space. I can tell you that there are multiple failures, even within the state of New Jersey, that continue to happen today. And we need to look a lot deeper at that as a country and as an industry.”
Riccio’s answer to a shrinking market is to grow, so that whatever comes next, St. Joseph’s stays St. Joseph’s.
