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Bill Seeks Financial Transparency for All NJ Hospitals

For-profit and nonprofit hospitals alike would be held to same standards.

Seeking an across-the board remedy for how hospitals -- the state’s nonprofits and for-profits alike-- disclose their finances, the Senate’s Health Committee on Thursday advanced a bill that would ensure that all New Jersey hospitals follow the same rules.

Delivering medical care to the poor is at the heart of the measure as a growing number of for-profit hospitals seek a piece of the charity pie funded by taxpayer dollars.

Currently, only a handful of New Jersey’s 72 acute care hospitals are for-profits, but experts predict their numbers will grow. An increasing number of for-profits have entered the state, most notably in Hudson County, where in recent years several hospitals have switched to for-profit status in controversial moves.

The prognosis remains grim for nonprofits struggling to raise cash to modernize at a time when revenue throughout the healthcare system is being squeezed by the drive to control spending. A number of deals are in the works for-profit groups looking to take over struggling not-for-profit hospitals.

Nonprofit hospitals must publicly disclose financial information, including revenue, net income or losses and the salaries of top executives. The bill, S-782 would require for-profit hospitals to report the same information in order to receive charity care funding.

“The fact remains that New Jersey taxpayers invest a great deal of money – and rightly so – into for-profit and not-for-profit hospitals throughout the state to make sure that there’s a facility nearby to meet their healthcare needs,” said the bill’s prime sponsor, Senate Majority Leader Loretta Weinberg (D-Bergen).

“Transparency in healthcare is essential,” said Joseph Scott, CEO of Jersey City Medical Center. “We are required as a not-for-profit to disclose all of our financial information, and for-profits should do the same.”

For-profit hospitals receive charity care from the state to partially compensate them for the unreimbursed care they provide to patients who are uninsured or can’t afford to pay the bills, Scott said. The law prohibits hospitals from turning patients away. Since charity care is public money, “we should have the right to see how that funding impacts them, and how much money the hospital is actually making.”

The New Jersey Hospital Association supports the bill’s goal of increased transparency, but has not endorsed the legislation.

“We don’t distinguish among the tax-exempt status of our members,” said Randy Minniear, senior vice president of government relations and policy. “We are mission-driven, and if hospitals provide the quality of care that patients deserve and expect, their tax status is irrelevant.”

Still, the for-profit trend has spawned debate in Hudson County, where Bayonne Medical Center, Hoboken University Medical Center, and Meadowlands Hospital all have switched to for-profit status.

Christ Hospital in Jersey City agreed to be sold to the California for-profit Prime Healthcare, but the deal fell apart earlier this year when Prime withdrew its bid in the face of community opposition. Christ filed for bankruptcy protection and on March 15 potential buyers will submit bids for the hospital.

The owners of Bayonne Medical Center, who also own Hoboken University Medical, have indicated interest in putting in a bid, and a proposal will come from a group that includes the nonprofit Jersey City Medical Center.

Under that plan, the hospital redevelopment company Community Healthcare Associates would buy Christ and then lease space to Jersey City Medical Center, which would continue to operate nonprofit hospitals in both locations. Whatever space Jersey City Medical Center didn’t need, Community Healthcare Associates would lease to other healthcare providers.

Hackensack University Medical Center has received state Department of Health approval to reopen Pascack Valley Hospital in Westwood in a joint venture with Texas-based LHP Hospital Group, which will operate it as a for-profit. Hackensack University Medical Center and LHP are also seeking health department approval to take over Montclair’s Mountainside Hospital, which is currently a for-profit.

Hackensack University Medical Center “is committed to transparency and has always gone above and beyond state and federal guidelines in this regard,” said spokeswoman Nancy Radwin. “It is premature to comment further on this legislation without the proper time to analyze how the added costs of additional legal and administrative compliance will impact the costs of healthcare for our patients.”

The measure’s supporters include several hospital unions, New Jersey Appleseed, a public interest legal organization, and the New Jersey Association of Health Plans, which represents the state health insurers. The consumer advocacy group New Jersey Citizen Action also supports the bill.

The measure passed the Senate’s health committee nine to zero with one abstention.

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