Questioning the Governor’s Commitment to Transparency

Hank Kalet | August 10, 2012 | Health Care
A conditional veto of a financial disclosure bill for hospitals has angered healthcare advocates, who argue there's a big difference between what Christie says and does

Gov. Chris Christie’s conditional veto of a financial disclosure bill for hospitals has healthcare advocates up in arms — and doubting his public stand on transparency. They say the proposed transparency requirements are necessary to ensure that for-profit hospitals do not operate under a veil of secrecy that could endanger patients and workers by putting profit before both.

But officials from the New Jersey Hospital Association, who opposed the bill, said Christie was right to call for a six-month study of the bill’s impact, arguing that the legislation could deter for-profit hospital companies from considering purchasing failing facilities in New Jersey.

Under the legislation, which was vetoed Wednesday, state charity care payments would have been tied to disclosure of financial and governance information. The bill, called the “New Jersey Hospital Disclosure and Public Resource Protection Act,” would have required hospitals getting charity care payments to report their funding sources and revenues, their expenditures, the vendors they deal with, and who sits on corporate boards to the state Department of Health and Senior Services. Nonprofits already submit this information to the federal Internal Revenue Service, but not to the state. For-profit facilities have no such requirement.

Christie said in his veto statement that, while his administration “remain[s] committed to government transparency,” the state needs to be careful when interfering with businesses. He said a “holistic response” is needed and that the disclosure legislation “fails to address the need for greater public access to the practices of all healthcare providers that benefit from State funding.”

“Any change where the State interjects itself into private business raises important issues that should be responsibly and cautiously evaluated,” he said. “My recommendations will ensure the proper attention to these matters.”

The revised bill requires the commissioner of health to review existing hospital financial-reporting requirements and the changes included in the bill that was approved by the Legislature, and to make recommendations on what kind of data should be disclosed and how. The commissioner has six months from when the bill becomes law.

The Health Professionals and Allied Employees union, which represents workers in the healthcare field, has pushed hard to require for-profit hospitals to operate under the same rules that nonprofits are forced to meet. HPAE believes that the passage of S782/A2143 was an important victory for patients and local communities.

“HPAE has repeatedly provided documentation of mismanagement and abuses of hospital finances that have hurt the community and workers,” HPAE President Ann Twomey said in a newsletter to members. “To allow for-profits to function under a veil of secrecy, without transparency and accountability is unconscionable.”

Sen. Majority Leader Loretta Weinberg (D-Bergen), the bill’s sponsor, criticized the governor Thursday, saying his veto belied his stated commitment to transparency and that it was part of a pattern in which the governor endorses openness in principle but vetoes bills that would give citizens more access to information.

“He “talks the talk on transparency, but he is not walking the walk,” said Weinberg on Thursday.

The governor, she said, made similar comments about legislation that would have required more disclosure from employees at the Port Authority of New York and New Jersey and from businesses seeking contracts for privatized services.

“The governor once again claimed his commitment to transparency, but when we introduce greater transparency he vetoes it,” she said. “There is no excuse to be vetoing bills that will allow taxpayers to know how their money is being spent.”

The bill, she added, asks nothing more of hospitals than to make specific disclosures to the state of information they already are required to submit to the federal government.

“With millions of dollars in charity care distributed in this state, and consider that we are in an era when public resources are scarce, that is not too much to ask for,” she said.
Weinberg said that for-profit facilities are operating with a different business plan. They are dropping out of networks and eliminating unprofitable specialties like OBGYN.

Twomey said at the press conference that the six-month review was unnecessary because the Department of Health is familiar with the issues.

“The purpose of this bill is to track public dollars and to make sure they go to patient care,” she said. “That’s to protect patients, protect communities, and protect workers. To veto this is to imply that someone else is being protected.”

The same rules should apply whether the hospital is for-profit or nonprofit, she said.

“These are hospitals we are talking about, not retail businesses,” Twomey said. “They are making a commitment to the state and the community to provide healthcare and with that comes accountability.”

Kerry McKean Kelly, vice president for communications for the hospital association, praised the governor’s action and endorsed the review period.

“We think the governor’s call for additional review is a good next step to find a workable balance on this issue,” she said in an email. “We fully appreciate the importance of transparency, but we also want an environment that will welcome new hospitals to provide healthcare services and jobs in our state.”

Weinberg disagreed with the hospital association’s argument that the new reporting rules would be a deterrent to new for-profit hospitals.

“My answer to them would be ‘What are you afraid of?’” she said. “What are you afraid of divulging that the public doesn’t need to know?’ They are happy to get taxpayer money in charity care and Medicaid, so what are they afraid of.”

Weinberg said the Senate would take up an override vote during the fall session — the legislation passed 32-4 in the Senate and 49-22 in the Assembly. An override would require 27 votes in the Senate and 54 votes in the Assembly. The Port Authority bill, which also will be scheduled for an override vote, she said, passed the Senate 29-0, with 11 not voting, and the Assembly 61-0, with 18 abstentions and one member not voting.

“I am hoping that my colleagues on the other side of the aisle are not afraid of the bombastic Chris Christie,” Weinberg said. “It is time that people stand up and talked the truth.”

Of the state’s 72 acute care facilities, seven have been taken over by for-profit firms and another three or four purchases are under consideration. All of them were existing facilities.