August 8, 2008

NJHA: Much Work Remains to Save N.J. Healthcare System

PRINCETON, N.J., Aug. 8 /PRNewswire-USNewswire/ -- Four new healthcare measures signed into law today are a step toward healthcare reform, but much work remains if New Jersey is to address the financial hemorrhaging, hospital closures and access worries confronting the state's healthcare system, officials at the New Jersey Hospital Association said today.

These bills establish an enhanced financial monitoring system for hospitals, require hospitals to hold annual meetings with their communities, standardize education programs for hospital trustees and place limits on hospital charges. Two of the four measures stemmed from recommendations of the state's Commission on Rationalizing Health Care Resources, commonly called the Reinhardt Commission after its chairman, Princeton University economist Dr. Uwe Reinhardt.

NJHA President and CEO Betsy Ryan urged state leaders to continue pursuing several more critical issues identified by the state commission.

"NJHA worked with legislators to refine these measures," said Ryan. "But admittedly, these bills signed into law today merely scratch the surface of the many critical issues identified by the Reinhardt Commission. The larger challenges that plague our healthcare system still await action, such as inadequate payments to hospitals and physicians, the rash of hospital closures and continued concerns over access to care."

The Commission's final report said its "most important conclusion" is that "a large number of New Jersey hospitals are truly in poor financial health."

Ryan cited several factors identified by the Commission that have driven New Jersey's hospital community to that grim condition. These issues demand attention if the state is to create meaningful and lasting reform of our healthcare system, she said.

Those issues include:

-- The state's chronic underfunding of hospital care for New Jersey's charity care patients.

-- Poor reimbursement to providers for Medicaid services. Hospitals currently receive just 70 percent of their costs for treating Medicaid patients, and physicians often receive even less.

-- The proliferation of ambulatory care centers and the inconsistent application of state regulations that give them a competitive advantage over hospitals.

-- The overuse of hospital Emergency Departments and the need to move patients to more appropriate sources of non-urgent care. State law requires hospitals to treat all patients regardless of their ability to pay, not only in the Emergency Department but throughout the hospital.

-- The misalignment of financial incentives between hospitals and physicians, which make it difficult for providers to work together to provide more efficient care.

"Clearly we cannot rest on the package of bills signed into law today," said Ryan. "As the Reinhardt Commission so thoughtfully explained, the problems confronting New Jersey's healthcare system are rooted much, much deeper. We urge our elected officials to continue their efforts to stop the bleeding in our healthcare system and ensure a future of accessible, quality healthcare for residents in all corners of our state. And we pledge our commitment to working with them to do what's right for the patients we serve."

New Jersey Hospital Association

CONTACT: Kerry McKean Kelly of New Jersey Hospital Association,+1-609-275-4069