TRENTON — Union and community advocates on Monday called for stronger state oversight of for-profit takeovers of not-for-profit hospitals at a hearing by two state Senate committees.
More financial information must be disclosed by the new for-profit owners, and the state must enforce the conditions it places on such sales, several speakers said.
“It seems like there’s a clearance sale of not-for-profit hospitals in New Jersey,” said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, with new owners “coming in and buying low, then selling pieces at a higher rate. We don’t know if that money is going into the hospitals or into somebody’s pocket.”
She and Ann Twomey, president of the 12,000-member Health Professionals and Allied Employees union, said the state must do more to protect those served by hospitals that are sold. Applications to sell St. Mary’s Hospital in Passaic and St. Michael’s Medical Center in Newark, as well as the three-hospital St. Clare’s Health System, are pending before state regulators.
“The Department of Health is not even enforcing the rules it has, and the rules are too bare-bones to begin with,” said Twomey, whose union members work at three of the for-profit hospitals. She cited the example of Meadowlands Medical Center in Secaucus, which has failed to file required financial reports for nearly a year, despite two separate fines of $6,000 each.
“There is great urgency to address this,” Twomey said. “Something exists in New Jersey that is attracting people to come and buy up these hospitals, and I don’t think it’s altruism. Conditions exist that allow a lot of money to be taken out of the health care system.”
Concerns over the management of some of the state’s six for-profit hospitals, as well as the pending sales of the five Catholic hospitals to a California-based for-profit chain, led the Senate Health Committee and the Committee on Legislative Oversight to convene the hearing.
Some owners of for-profit hospitals in Hudson County have increased their revenues by breaking off contracts with managed-care companies and charging patients who are admitted through their emergency rooms out-of-network rates, said several speakers, including Ward Sanders, president of the New Jersey Association of Health Plans. Their charges for the out-of-network care, based on information recently released by Medicare, are among the highest in the country.
In addition, owners of Meadowlands and Bayonne Medical Centers have sold their land or buildings to real-estate investors to raise cash. State Sen. Ronald Rice, D-Newark, said he believed the state should be informed of the details of those sale-leaseback agreements.
Sen. Robert O. Gordon, D-Fair Lawn, the chairman of the legislative oversight committee, said the lawmakers were gathering information before deciding what kind of legislation to introduce.
“We’ve heard of weaknesses in the existing system,” he said at the end of a four-hour hearing that included information from 10 invited speakers, “and will endeavor to fix it.”
Only one for-profit hospital company — Prime Healthcare Services, which plans to buy St. Mary’s Hospital in Passaic and four other hospitals — sent representatives to the hearing.
A Prime executive, Arnie Kimmel, said he supported a measure introduced by Sen. Loretta Weinberg, D-Teaneck, that would promote financial transparency by having for-profit hospital operators disclose the same information that not-for-profit operators do. “I don’t know how to be a better citizen than that,” he said.
The absence of the Hudson Holdco group, which owns Bayonne, Hoboken University Medical Center, and Christ Hospital was noted with irritation by state Sen. Joe Vitale, chairman of the Health Committee.
Hospital owners must answers legislators’ questions because of the public funding they receive, he said, adding “A hospital license is a privilege, not a right.”
BY LINDY WASHBURN