Challenges Facing Hospital Industry Include Rising Costs and Spread of Infections

May 1, 2012 | Health Care
Betsy Ryan, President of the New Jersey Hospital Association, says hospitals are in trouble because they aren't able to recuperate costs.

These are tumultuous times for hospitals, according to New Jersey Hospital Association President and CEO Betsy Ryan. She sat down with NJ Today Managing Editor Mike Schneider to discuss the issues facing the healthcare facilities.

Ryan said hospitals find themselves in trouble because many payers, mainly insurance companies and the government, do not cover their costs. “The payers are forcing change, employers are forcing change,” she said. “Everyone knows our current system is not sustainable.” She added that Medicaid and Medicare rates are low for hospitals to collect from the state and federal government and they could decrease even more.

Another issue facing hospitals is charity care, which refers to treating patients who lack health insurance. While Ryan said hospitals receive some reimbursement from the state, it’s not enough. “That’s a societal mission that we embrace, to care for the poor,” she said. “But when you’re losing money on every patient you treat, it’s difficult.”

Ryan said she believes mergers and consolidations are a result of hospitals trying to be more efficient and reduce costs and patients shouldn’t be worried that care will diminish. “There’s a very rigorous regulatory process to vet any newcomers in the state of New Jersey,” she said. “They must pass through the state Department of Health certificate of need process, which is a rigorous process. And the state and federal government maintains rigorous surveys to ensure quality.”

Ryan discussed the issue in northern New Jersey where Valley Hospital in Ridgewood and Englewood Hospital and Medical Center oppose the reopening of Pascack Valley Hospital in Westwood by Hackensack University Medical Center. The two opposing hospitals claim the reopening of another hospital will hurt them financially and could cause them to close.

“I think the proof will be in the pudding because as you indicated the state has opined and Pascack Valley will reopen. But what we have seen in other areas of the sate is when a hospital closes, the financial condition, health of the surrounding hospitals actually improves and admissions go up in surrounding hospitals,” Ryan said. “So when you add new competition, they’re going to take from somewhere.”

Another issue for hospitals is the possibility of the spread of infections, which is one the New Jersey Hospital Association is working on, according to Ryan.

“It’s a challenge we have embraced because we know that we want to provide quality patient care to all the community,” she said. “About 10 years ago we, NJHA, opened an institute for patient safety and quality and we really focused on collaborative efforts bringing all the hospitals together to share data and best practices and we’ve had some great success stories in reducing infections, in reducing bed sores, many other items.”