A charity scare for nonprofit hospital

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It doesn’t take a doctorate to realize the prognosis for nonprofit Hudson County hospitals is looking grim.

It doesn’t take a doctorate to realize the prognosis for nonprofit Hudson County hospitals is looking grim.

If Hoboken University Medical Center and Christ Hospital, in Jersey City, become for-profit care centers as expected, it will raise the number of for-profit Hudson hospitals to four. That’s a serious concern for Joseph F. Scott, CEO of Jersey City Medical Center, as the additional charity-care cases he expects as a result will put an even greater financial strain upon the hospital.

Scott said he’ll ask the state to require all hospitals to care for the poor and the uninsured, and take steps to protect employers and workers in Hudson County from a spike in health insurance premiums that he warns will result if the for-profits refuse to join health insurance networks and raise their rates.
He also plans to ask the state to require monthly reports on charity care admissions. Last year, Jersey City Medical treated about 4,500 charity-care patients — a quarter of its 18,000 admissions, and received $48 million in charity care reimbursements in the 2011 fiscal year that ended June 30. But he wants funding reallocated if the state determines charity admissions are falling at the for-profits; otherwise, for-profits share in reimbursements without treating the patients. The state needs “to hold them (for-profit hospitals) accountable for treating charity cases.”

By the end of the month, state Health Commissioner Mary O’Dowd is expected to rule on a request to transfer city-owned Hoboken UMC to the owners of the for-profit Bayonne Medical Center. At the same time, Christ Hospital, in Jersey City, has announced plans to be acquired by a California-based for-profit. Meadowlands Hospital, in Secaucus, already is a for-profit.

“We will be surrounded by for-profit hospitals, and their goal is to make money,” Scott said. Such hospitals “won’t want to treat patients who don’t have insurance, because it doesn’t fit their for-profit model — and those patients (will) end up coming here.”

Representatives of HUMC Holdco — the Bayonne Medical Center group seeking to take over Hoboken’s hospital — have insisted they won’t turn away the poor and uninsured, and that they are negotiating with health insurers and plans to bring both Bayonne and Hoboken into insurance networks.

Meadowlands Hospital was acquired by a for-profit company in December. Tomas Gregorio, CEO, said that since the change in ownership eight months ago, the hospital “has provided $18 million thus far in charitable care … and expects that number to increase significantly through the end of the year.”
Christ Hospital was reimbursed $12.4 million by the state for charity care it provided in fiscal 2011, according to the state.

During a hearing on the Hoboken transfer before the state Health Planning Board, Neil M. Sullivan, assistant commissioner of the state Department of Banking and Insurance, said about 41 cents of every health insurance premium dollar reflects spending on hospital care, and when out-of-network hospitals raise rates, “it has an impact on premiums.”

Bayonne President Daniel Kane said his hospital has a contract with AmeriHealth, and is in discussions with other carriers: “It is not our strategy to be out of network.” However, he added, “hospitals in New Jersey rank 48th (nationwide) in profits, and 60 percent of the hospitals in New Jersey are losing money.”

And Phillip S. Schaengold, chief transition officer for HUMC Holdco, said years of insufficient payments by commercial insurers is partly to blame for the financial troubles of hospitals like Hoboken, but the new owners will “turn around the finances of the institution, so it no longer relies on the state’s largesse to provide services to the community.”

Scott isn’t so sure, though. He said Jersey City Medical has seen a steady increase in charity care patients who live in Bayonne, rising from 1,681 in 2007 to 2,562 in fiscal 2010.
And state Sen. Joseph F. Vitale (D-Woodbridge), vice chair of the Senate health committee, said HUMC Holdco “has an interest in getting out of all contracts and going entirely out of network — that is the business model.”

It’s a model that doesn’t work, Vitale said, since higher out-of-network bills are passed on to the entire insurance pool, raising premium costs.

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