New Jersey Hospitals Experiencing Financial Difficulties Because of Recession, Survey Shows
The recession "has dealt a staggering blow" to hospitals in New Jersey, which have experienced declines in elective procedures and an increase in demand for charity care, according to a survey by the New Jersey Hospital Association, the Bergen Record reports (Layton, Bergen Record, 2/18). The survey includes responses from half of the state's 74 hospitals. It found that:
- Margins for the hospitals decreased from 3.7% in 2007 to minus 4.5% in 2008;
- 45% of hospitals said they had laid off between six and 140 workers in 2008, and 21% said they expect layoffs this year, ranging from 10 to 120 workers;
- Charity care and emergency department patients increased in more than three-quarters of the hospitals;
- Elective procedures decreased in 60% of the hospitals; and
- Charitable contributions were down at 72% of the hospitals.
New Jersey's hospitals have provided more than $1.3 billion worth of health care to the uninsured, but the current state budget reimburses them for $603 million, creating a nearly $700 million shortfall. Hospitals also do not receive full reimbursement for services from Medicare, according to the Record. In addition, hospitals are "bracing for an expected surge" in patients seeking charity care this year as newly uninsured people lose extended health coverage, the Record reports.
NJHA President and CEO Betsy Ryan said that the recession has "weakened [hospitals'] finances, drained their cash reserves, and forced them to make extremely difficult decisions about job and service cuts," adding that "it's affecting patients as well, who clearly are struggling with tough choices about their health care" (Bergen Record, 2/18). This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
