Statement of HPAE Policy Director Jeanne Otersen to the Senate Budget Committee - Health Professionals & Allied Employees

Statement of HPAE Policy Director Jeanne Otersen to the Senate Budget Committee


Tuesday, March 5, 2013

Senate Budget Committee

Jeanne Otersen, Policy Director, HPAE


Thank you, Chairman and members of the Senate Budget Committee for the opportunity to speak to you about the Governor’s proposed FY2014 budget. My name is Jeanne Otersen, and I represent the Health Professionals and Allied Employees, a union of 12,000 nurses and health care workers in NJ.  I want to focus my comments on funding, transparency and enforcement of healthcare quality by the NJ Department of Health and for UMDNJ and University Hospital at the beginning of the proposed implementation of the reorganization.

As we all know, budgets reflect priorities, and for several years, our state budgets have reflected the declining priority of strong and effective enforcement of standards in our health care delivery system.

And again, in this year’s budget, DOH, along with DEP, will get the largest funding cut of all state agencies – almost 4%.  Major changes taking place in the industry – from the for-profit incursion into NJ, to the expansion of surgery centers, hospital closings and bankruptcies, and the focus on primary care and industry consolidation due to the Affordable Care Act – demand a sharper and more transparent focus on assuring that our health care delivery system remains committed to providing quality, accessible and affordable care to our communities.

But that is not what we have gotten.  Instead, the NJ Department of Health no longer conducts hospital inspections, except in response to complaints. Since Feb 2011 the DOH  relies  on accreditation surveys conducted by either JCAHO or DNV Healthcare, and  “regulatory compliance statements” filed by the hospitals.  These accreditation reports are not publicly available, and not even the DOH gets a hospital’s accreditation report unless specifically requested.

Rather than conduct inspections to monitor compliance with state standards, the DOH asks each hospital to fill out a ‘Regulatory Compliance Statement’, stating that their intention is to comply with state law and regulation. Even this simple requirement has been violated by at least one hospital. Transparency in the Department has declined and inspection results that used to be available on the DOH website now must be ‘OPRA’d’.

The 2014 DOH budget proposes only $2.5M in revenue from “licenses, fines, permits, penalties and fees”, down from nearly $12.6M in FY2012.  We wonder if this reflects, in part, diminished enforcement actions and/or cuts to penalties imposed on hospitals for violating state regulations?  While my intention is not to promote frivolous fines, it would appear the DOH has, in fact, reduced enforcement actions – and I would ask that this Committee ask that question of the DOH.

Right now, we know that a new heavily-capitalized for-profit company, Prime Health Care is shopping to buy 3 or more NJ hospitals.  Over and over, our communities find themselves facing a decision to either close an important community hospital or to accept a for-profit company that may reduce access to care. 

Yet, the DOH has also eliminated a $30 million hospital stabilization fund intended to help financially distressed hospitals keep their doors open while the state assists in longer-term strategies.  Without that fund, Christ Hospital in Jersey City would probably not be standing, among others. 

Instead of abandoning programs that may help stabilize our community hospitals, we need  to provide  more funding; more monitoring and oversight of financially distressed hospitals and institute requirements that hospitals coordinate programs and services, share resources and conduct community needs assessments.

The NJDOH has ended the Hospital Relief Subsidy Fund, and substituted an application process for hospitals based on patient outcomes, DSRIP, which is still being developed, and we hope will incorporate the transparency that is missing from too many DOH programs and practices.

The lack of commitment to public transparency is lastly demonstrated by the DOH’s failure to act on the Governor’s conditional veto of S782, legislation that would require financial and governance reporting to the NJDOH by all hospitals, including for-profits that are now exempt from many of the public reporting requirements of non-profit hospitals.  It has been 8 months since the Governor asked the DOH Commissioner to develop recommendations.  None are forthcoming. If we have any chance of monitoring appropriate use of taxpayer and public funds, we need this transparency and accountability.

Every hospital in NJ receives substantial public dollars, including $675 million in charity care.  While we share the hospitals’ relief that funding is steady, and Graduate Medical Education is increased, we are concerned that University Hospital’s funding is flat – just as the deadline for implementation of the reorganization plan begins.  It is unclear to us from the budget how the implementation funding is reflected, since the reorganization structure does not appear to be reflected in the budget. The Community Oversight Board required by the law has still not been appointed, though we understand that an RFP is being issued shortly for a manager of University Hospital.

In ending, HPAE’s front-line workers take care everyday of everyone who comes through our hospital doors. We believe that – First, patients regardless of their ability to pay, deserve high quality care.  Second, our communities deserve access to that care and for that they need a DOH not only committed to serving the public safety – but one with the resources to carry out that mission.  Third, the public has the right to and deserves transparency and accountability for the millions in tax-payer funding that go to our hospitals.  We hope you will revisit the proposed budget and call for increased funding, enforcement and transparency in the DOH’s mission this year and moving forward.

Thank you for your time and consideration.