Since 2000, 18 hospitals in New Jersey have closed, eight have filed for bankruptcy and eight have converted to become for-profit institutions. At Bayonne Medical Center, Carepoint Health charged one insurer more than $36,000 to treat a migraine in its emergency department and more than $8,000 to bandage a finger. Health and Human Services and Senior Citizens Committee Chair Sen. Joseph Vitale told NJTV News Anchor Mary Alice Williams that the level of disclosures should be the same for non-profit and for-profit hospitals.
Investors are buying struggling hospitals so they remain in communities. When asked if they are improving health care, Vitale said there are several converted hospitals in New Jersey and the vast majority of them do a good job in terms of quality because if they didn’t, they wouldn’t succeed or survive.
Going from a not-for-profit to a for-profit changes a few aspects significantly, said Vitale. He said one change is the charitable mission that is always required for a not-for-profit hospital. He said that for-profit hospitals don’t have that charitable mission and have investors or stockholders to answer to. He said that for-profits are required to maximize their profits and minimize their expenses, not to the extent where they harm patient care or safety, but they maximize their profit. He said that is seen when charges are incurred for bandages or migraine headaches or other procedures that are hundreds of thousands of dollars, but if it were an insured procedure in network with a commercial health insurer, the reimbursement and the charges would be much less.
The finances of non-profit hospitals are public information. For-profit owners consider finances proprietary and don’t divulge much even though half of their revenue comes from taxpayer dollars — Medicare and Medicaid. Vitale said that the level of disclosure for for-profit hospitals and non-profit hospitals should be the same and they should be treated equally. There was legislation addressing that issue that passed both houses last session but Gov. Chris Christie vetoed it and didn’t explain why, said Vitale.
Vitale explained that not-for-profit hospitals provide financial data to the department so the department and policy makers can understand the well-being and the health of the facility. He said that for-profit hospitals don’t have that requirement. He said that they provide the same type of care and are in a community, and there are state dollars invested in those facilities and people should have a right to know how they are doing financially.
When Gov. Christie vetoed the bill, he said he wanted to “prevent the state from over-reaching into the business arena,” but the State Health Commissioner has considered asking hospitals to post audited annual financial statements and unaudited quarterly financial statements on their websites. Vitale said that has not happened yet.