Too Many Hospitals In New Jersey?

New Jersey has 81acute care hospitals and Governor Jon Corzine thinks there may be 25 too many. He’s signed an executive order establishing an 11-member commission to study “whether all our hospitals are necessary, whether they are suitably located to meet health care needs and whether state funding is properly distributed among them”.

Corzine said he's hopeful the panel's recommendations might help the state save money, but said New Jersey may simply rearrange how it allocates money to try to tackle health care disparities among regions and races.

The state provides about $1 billion per year to hospitals to pay for treating uninsured patients. This fiscal year's budget also includes millions in direct grants to hospitals and health systems affiliated with hospitals. [Not to mention the billions the state spends on Medicaid and NJ Family Care.]

Earlier this year Corzine tried to slap a $1,424 monthly tax on each hospital bed to help pay for charity care, but was shot down when it was revealed losing hospitals out numbered the winners by a margin of 2 to1. In other words it was a cost shifting scheme, with urban hospitals coming out as the winners and suburban hospitals the losers.

The New Jersey Hospital Association has said 40 percent of the state's hospitals lost money last year and the average hospital earned a 1 percent profit.

Given the precarious financial picture of the state’s hospitals, adding another big ole tax never made sense to us. It certainly wouldn’t be much help in “bringing down the cost of quality health care.” Maybe Corzine’s idea for rearranging funding by region and race will win the day, because cutting staff to coincide with hospital closures doesn’t seem to be on the table.

Corzine said he did not expect any physicians or nurses to be laid off as a result of the panel's findings. The commission will issue its report by June 1, Corzine said, to allow the recommendations to be put in place by the 2008 fiscal budget

It will be interesting to see who Corzine appoints to the commission, what they ultimately recommend and if they can get a handle on identifying the uninsured being treated in New Jersey’s hospitals. In any case, we doubt much has changed since the last state commission looked at the hospital funding problem back in 1999.