Geography, State Legislation Key to Financial Health

New Jersey, for example, is an epicenter for the convergence of punishing economic and legislative forces. The recently released report by the Commission on Rationalizing Health Care Resources, convened at the behest of Democratic Governor John Corzine, details what's driven hospitals to "the cusp of a crisis," and led New Jersey Hospital Association president Betsy Ryan to say the Commission's report acknowledges that Garden State hospitals "are truly in poor financial health."


The situation there is particularly acute. In the past 16 months, five New Jersey hospitals have closed, another five have declared bankruptcy with another half dozen or so signaling their intentions to shut their doors for good. According to the NJHA, the national operating margin for hospitals is about 5-6 percent; in New Jersey it's one half of one percent.

Charity care is a bewildering, seemingly insoluble issue. The Garden State also suffers since there are no state hospitals to handle the uninsured so all hospitals must handle these cases. Currently, the state contributes about $715 million in reimbursement to those hospitals who are, however, providing about $1.3 billion worth of care.

Though the situation in Tennessee is much better by comparison-county owned and investor owned facilities handle charity care--Tennessee Hospital Association president Craig Becker nonetheless feels New Jersey's pain.

"Everyone wants to pay less, the government, commercial health insurance providers so the result is hospitals are getting whipsawed," he says. "The issue of uncompensated care is a real strain on hospitals."

Becker's hopeful that as the presidential primary season roars to a close and the final two candidates emerge, "healthcare will become a major part of the presidential debate. It must," he says, move up the ladder of this country's priorities."









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