One Million Dollar Cut Projected Locally in Hospital Funding

In another cost-cutting measure that affects health care, the New Jersey Department of Health and Senior Services announced in June 2010 that its funding for the New Jersey Hospital Care Payment Assistance Program will result in the South Jersey Health System losing more than $1 million. The payment assistance program helps patients who are unable to pay their medical bills in full.

The department attempted to soften the blow by maintaining that overall funding would increase because the changes would leverage more federal funding. A department spokesperson said that the state would increase its funding by $85 million over the previous year but that the funds would be distributed in a more equitable fashion.

A spokesperson for the New Jersey Hospital Association noted that New Jersey lost 10 hospitals in the past five years and six others had filed for bankruptcy. Also, the state's hospitals are due to lose $4.5 billion in federal funds over the next 10 years as a result of the new health care reform law. Accordingly, New Jersey will suffer a proposed $120 million cut in Medicare payments.

The results of the cuts will undoubtedly cause some hospitals to cut services or close down. The change in formula could benefit other hospitals. For instance, St. Joseph's Hospital in Paterson will receive an additional $7.4 million in the proposed funding formula, while Valley Hospital will lose more than $500,000. The strategy is to try to prop up hospitals that perform more charity care, such as St. Joseph's. Health Commissioner Dr. Poonan Alaigh commented that with limited funding, the state needed to benefit the safety net hospitals to care for the more vulnerable patients.

Clearly many New Jersey hospitals will suffer, especially those in South Jersey, a region that is less populated than the northern part of the state and presumably provides care for fewer low-income patients. New Jersey officials obviously felt they had to make a tough choice under these circumstances. Patients in these areas may well have to look to retail clinics or urgent care centers, if they exist.

The outlook for overall patient care may be dire, at least for those hospitals that do not just care for low-income patients. With cuts in staffing and nursing care usually the first to go, specialized attention, treatment and shorter stays for patients are inevitable. The expenses will have to be made up in some fashion, usually through more expensive care for those who can pay or have access to insurance.

Related Sources:

Paterson's St. Joseph's hospital gains under proposed funding

NJ hospitals to suffer under more cuts in funding

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