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NJHA: State Report Provides Thorough Examination of Hospital Fiscal Woes
Date:1/24/2008

But Greater Attention Needed for Funding Shortfalls

PRINCETON, N.J., Jan. 24 /PRNewswire-USNewswire/ -- The final report released today by the Commission on Rationalizing Health Care Resources provides a thorough and candid explanation of the fiscal crisis gripping New Jersey's hospitals, but falls short on delivering solutions to address the healthcare system's fundamental need for more funding.

That's the consensus of the New Jersey Hospital Association, the state's largest hospital trade organization representing 112 hospitals.

"If I had to grade the Commission's work, I would give it an A for effort but an overall grade of Incomplete," said Gary Carter, NJHA president and CEO.

Gov. Corzine created the Commission in October 2006 to examine hospitals' financial woes and recommend reforms that would shore up hospitals, protect state resources and preserve access to care for New Jersey's residents. The situation has gained greater urgency in that 16-month span, with five hospitals closing, five others declaring bankruptcy and numerous others announcing plans to close. All told, 18 New Jersey hospitals have closed since 1992.

Betsy Ryan, NJHA's chief operating officer and president-elect, applauded the Commission for several key findings, including its recognition of the severity of the problem confronting New Jersey's hospitals and the communities they serve. Ryan noted key sections of the Commission's report that acknowledge that Garden State hospitals "are truly in poor financial health" and that "the charity care program, like Medicaid, pays hospitals less than the full cost of care. The program is thus another example where state government pays less than full costs - hospitals and other payers are expected to make up the difference."

The document provides a compelling primer not only on the factors that have driven hospitals to the cusp of crisis, but how these problems have a ripple effect in rising hospital costs, overuse of Emergency Departments and many other problems that directly touch the lives of New Jersey's residents.

But Ryan said the Commission missed an opportunity to address some of the healthcare system's most urgent needs. They include:

-- The undeniable need for sufficient charity care funding - new funding, not just a shift in existing dollars.

-- An infusion of funding into the Medicaid program, especially for physician reimbursement. New Jersey's woeful underfunding of this program has numerous ramifications in patient access to care, overburdened Emergency Departments and the overall fiscal health of hospitals.

-- The need to examine hospitals within the context of the entire continuum of healthcare services. Any plan for the future of healthcare in our state is incomplete unless it recognizes the role of not only hospitals, but also federally qualified health centers, ambulatory care facilities, long term care, home health, assisted living and other types of providers.

"We do not mean to diminish the Commission's work," said Ryan. "It provides a thoughtful explanation of the factors leading to hospitals' financial distress, along with some sound recommendations that could help improve our healthcare system. But despite those efforts, hospitals' financial worries will persist if the state does not address the critical shortcomings that remain. As long as hospitals are underpaid for each and every Medicaid and charity care patient, they will continue to struggle and close."

NJHA pledged its support and expertise to help state policymakers and legislators as they work to translate some of these key concerns and recommendations into meaningful reforms.


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SOURCE New Jersey Hospital Association
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