Don’t Play Politics with Charity Care

Written by Linda J. Schwimmer

Charity-care dollars have to go to safety-net hospitals, rather than being distributed to every facility in the state

New Jersey hospitals cannot legally — or, in my opinion, morally –turn away patients who need care but cannot pay. They also cannot turn away patients who pay less because they are covered by Medicaid and not private insurance. Hospital doors in New Jersey are open to all people who are sick or injured and in need of emergency care.

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How will sale of Saint Michael’s Hospital transform healthcare in Newark?

Governor Chris Christie’s administration has put off for nearly three years deciding what it should do about the future of healthcare in Newark. But the scheduled sale of the bankrupt Saint Michael’s Medical Center, one of five Newark hospitals, should force a decision.

The outcome of the sale will likely help shape the quality of healthcare that Newark residents receive, according to industry attorneys and analysts. It could also affect the financial stability of all of the city’s hospitals.

State involvement in hospital bankruptcies normally is limited to issues related to operating licenses. But not in this case, for three reasons:

First, the New Jersey Health Care Facilities Financing Authority, which is chaired by Acting Commissioner of Health Cathleen Bennett, issued tax-exempt bonds for Saint Michael’s that currently total roughly $230 million.

Second, the state also owns another troubled Newark facility — University Hospital, which is facing millions of dollars in annual operating losses for the foreseeable future.

Third, if the state allows the sale of Saint Michael’s it should get a short-term financial shot in the arm. But if were to decide to take over the facility, it could realize a greater payback over a longer period.

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New Jersey’s Vanishing Non-Profit Hospitals

Starting this year, New Jersey nonprofit hospitals are set to be sold to out-of-state, for-profit entities at an alarming rate. New Jersey is already home to for-profit hospitals in which profitability seems to rest largely on complicated sale-leasebacks of their land and buildings, patient admissions through the emergency room that allow for excessive charges for “out-of-network” care, and other predatory practices.

These for-profit models appear to be in direct contrast to the goals of health reform, which call for reducing unnecessary treatment, increasing patient satisfaction and ensuring that all Americans have access to primary and preventive care in community settings, while reducing expensive emergency room use.

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